USD/MXN: Rally nears forecast zone – Societe Generale

Societe Generale's Latam strategy notes that the Mexican Peso (MXN) is on track for its worst month since August 2024, with losses nearing 5% against the US Dollar. This is due to higher US yields dampening risk sentiment. The USD/MXN pair has broken above 17.00 and reclaimed its 200-day moving average, now resting near the bank's revised year-end forecast of 18.00.

Traders anticipate consolidation around this psychological level. The USD/MXN has recently crossed a multi-month descending trend line and reclaimed the 200-Day Moving Average. The pair is now heading towards a March peak near 18.16, which could serve as an interim hurdle. Beyond 18.16, potential objectives may be located around 18.55 and 18.80.

Meanwhile, AUD/USD has turned lower, hitting nine-week lows below 0.7000, while USD/JPY consolidates around 157.50. Rising Fed rate-hike expectations and oil-driven inflation concerns continue to support the US Dollar, keeping it near a two-month high and bolstering the pair. Gold remains modestly up but is still below $4,150 and near its lowest level in eight months, warranting caution before positioning for a significant rally.