Mexican peso falls to a two-month low. Watch the chart

Technical Analysis

Author: Adam Button | mxn

Continuation of the trend

One of the major divergences in markets in the past two months has been the lack of enthusiasm in emerging market currencies. Most -- if not all -- are way below pre-pandemic levels.

Among the laggards are the LatAm currencies, including BRL, MXN and COP. All three are near the top of the chart today and up strongly. That's a very good sign for those beaten-down currencies, and also for risk assets in general.
EM FX performers
One I'm paying particularly close attention to -- because I think it's a long-term positive secular story -- is the Mexican peso.

USD/MXN has hung out in a range since since breaking lower from a triangle formation in May. Now, it's headed back to the lower end of the range.

I think there is a great case for shorts here, particularly if 21.47 breaks.
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