The iShares MSCI Mexico is seeking support at its 30-day moving average.
The iShares MSCI Mexico is seeking support at its one-month moving average
After several days of decline, the most representative ETF of the Mexican market is looking for a support level.
A tough day for global markets highlighted by US inflation; emerging markets also felt the impact. EWW, Mexico’s most representative ETF, is seeking support.
The one-month trading moving average (22 days) aligns with the current price. Given the bullish trend that led to a rise of over 174% in recent years, this signal has served as a buying indicator. Could this be a new opportunity?
The price of $66 seems like an acceptable level to enter what has been called “the LATAM star” due to the significant increase in growth, investment, and the price of Mexican assets derived from nearshoring.
The so-called “nearshoring” of a significant portion of the American and Canadian industries explains this phenomenon of high demand for Mexican industry, employment, and services.
Nearshoring refers to the practice of transferring business operations, such as manufacturing or service centers, to a nearby country rather than a distant one.
It is often done to take advantage of lower costs, reduce logistical dependence, and avoid the dependency of countries with different values.
The United States’ objective is to reduce dependence on China, in what is called the “decoupling” of its economy. The increasing tensions surrounding Taiwan, trade barriers, and China’s growing influence in the world have given the United States enough reasons to rethink how its economy distributes its supply chains.
Nearshoring for the USA involves the relocation operations to Mexico or other countries in Central or South America. This trend is also expected to reach countries like Argentina, Brazil, and Colombia.
Mexico is undoubtedly the most benefited country. The demand for its industry in health, auto parts, and other critical supplies is leading to significant economic growth. Mexico has experienced a growth of 3.2% during 2023, and a similar figure is expected in 2024.