USD/MXN hits two-week lows, tests key support near 18.65

• Mexican peso among top performers on Tuesday. 
• USD/MXN back near multi-month lows, testing critical support. 

The USD/MXN is falling for the second day in a row, after being rejected from above 18.85. The pair bottomed during the American session at 18.65, hitting the lowest level in two weeks. 

Near the end of the session trades at 18.67, down 0.70% for the day. It remained above the January low reached mid-January at 18.63. A firm break below 18.65 would clear the way to more losses, probably targeting 18.40. 

Several times during January USD/MXN approached 19.00 but only to reversed and turn to the downside. Last week and on Monday it failed to hold above 18.85 and decline. 

The main trend is still bearish. A recovery with a close above 18.90 would alleviate the pressure, while above 19.00 the pair would offer signs it has established a bottom. 

Risk sentiment helps EM currencies

In Wall Street, equity prices are rising sharply on Tuesday. The Dow Jones gains 1.66% and the Nasdaq 2.11%. Main Mexican indexes are up by more than 2%, joining the global rally. 

The improvement in risk sentiment boosted the demand for emerging market currencies. The Russian ruble is up more than 1%, followed by the Colombia peso that gains 0.95%.