- USD / MXN is declining modestly on Tuesday, testing the strong 20.50 / 60 barrier.
- The very short-term negative bias differs from the positive outlook on the daily chart.
The USD / MXN falls for the fourth time in the last five trading days. It is testing the 20.50 / 60 support barrier which, so far, is preventing a further decline. The area is likely to hold, particularly in the current environment with mixed stocks on Wall Street, US yields rebounding and the dollar gaining momentum against major currencies.
If the pair manages to break firmly below 20.50, the next target is the even more important support area at 20.35, where we see the confluence of a horizontal level and the 100 and 55 day moving averages. If broken, the outlook for the Mexican peso would improve significantly and will likely test the 19.90 level.
The USD / MXN rebound from current levels could gain momentum for a rally towards 20.85 / 90, the next strong resistance. If the dollar recovers to 21.00, a test of 21.50 will start to look like a not-too-distant possibility.
USD / MXN daily chart
USD / MXN technical levels
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