USD/MXN extends correction from one-month highs, falls under 19.70

• US Dollar drops versus Emerging market currencies after another negative US economic report. 
• USD/MXN accelerates to the downside, erases weekly gains.  

The USD/MXN turned negative for the week after falling sharply on Thursday, extending the correction from one-month highs and dropped below 19.70.

Weaker USD drivers pair lower 

The Greenback again was hit by lower than expected US economic data. The ISM non-manufacturing index dropped from 56.4 to 52.6, below the 55.0 expected. It was another report that pointed to a slowdown in the US, increasing market expectations of more rate cuts from the Federal Reserve. 

Today, the decline of the US Dollar offset risk aversion pushing USD/MXN to the downside. The pair continues to correct lower after reaching yesterday a one-month high above 19.80. Recently the pair printed a fresh weekly low at 19.66. 

If the correction continues the next support might be seen at 19.62 (20-day moving average) followed by 19.50. On the upside, now 19.75 has become the immediate resistance followed by 19.85. A break above the last one would open the doors for a test of 20.00.