Drops below 50 and 100 DMA, bears eye 20.5000

• The Mexican peso keeps the dollar under pressure, up 2.24% in the week.
• Risk appetite rises on the session, as shown by the surge in global equities.
• USD/MXN Forecast: Neutral, but the path of least resistance is to the downside, although it faces solid support around 20.50.

the mexican peso rises against the dollar during the American session, after the first rate hike in three years by the US central bank, which seems to be ignored by the USD/MXN traders, who pushed the pair from around 21.00 up to the 20.50 zone. At 20.5229, the USD/MXN reflects risk appetite.

An upbeat market sentiment represented by global equities keeps risk-sensitive currencies bid. In the currency space, the AUD, the NZD and the CAD extend their gains, followed by the high interest rate of the Mexican peso, which appreciated with ebbs and flows, benefited by the increase in Mexican 10-year bonds, rising 33 bps to 8,861%.

Meanwhile, the US Dollar Index, a gauge of the dollar’s value against a basket of six rivals, continues its free fall, down 0.68% to 97.728, a tailwind for USD/MXN.

USD/MXN Price Forecast: Technical Outlook

Overnight, USD/MXN hovered in the 20.60-70 zone until the opening of the American session, when the pair pierced the daily low of March 2 at 20.5783, reaching a daily low of 20.5060.

That said, the USD/MXN bias is neutral. However, in the last two days, the pair broke below the 50 and 100-day moving averages (DMAs), changing the bias from neutral to up as spot price approaches the 200-DMA at 20.4100. . The USD/MXN path of least resistance is to the downside, and the first support for the Mexican peso would be 20.5000. A break below the latter would expose the 200 DMA at 20.4100, followed by the Feb 23 yearly low at 20.1558.

To the upside, the first resistance for the USD/MXN would be the 100 DMA at 20.5660. Once cleared, the next resistance would be the 50 DMA at 20.7019 and 21.00.

Additional technical levels