The USDMXN is coiling.

In an environment where the SPX continues to press higher towards all time highs, and the Nasdaq composite continues to brush new all time highs, you would expect that an emerging market currency like the MXN would be stronger. With the continuous search for yield and Banxico’s 5% higher rate that the FOMC, it is a surprise that the USDMXN exchange rate is not lower. That has to be frustrating to USDMXN shorts, which now are at risk on a move back above the 23.00 level. 22.7500 is the first level of resistance, but a clean break back above the 23.00 level could ignite a short squeeze higher.