USDMXN set to challenge range highs.

Correlations have not worked in FX for awhile, but one of the stronger ones still looked at is the SPX/EM one. When stocks come down, EM (Emerging Market currencies) tend to come under pressure as a result. With the SPX down today and closing in on key support at the 4375 level, the risk of a move lower in MXN (higher USDMXN) is increasing which could propel the pair towards range highs at the 20.2300-20.2500 level. The 200dma at the 20.1100 level may offer some minor resistance too. One of the things that should be noted is all of 2021, with stocks moving higher to all time highs, the MXN has been unable to capitalize on this by staying above the 19.6000 level, even with Banxico raising rates (twice) in recent months, which heightens the risk of a weaker MXN if stocks do come under pressure near term.