Testing the 200 DMA as the bears eye the 20.1500 level

• The Mexican peso registers its biggest weekly gain, 2.39%.
• Market sentiment is mixed; dollar rises but falls against risk-sensitive currencies.
• USD/MXN Price Forecast: Neutral, but a daily close below the 200 DMA would expose the pair under bearish pressure.

The Mexican peso extends its weekly recovery of 2.39% against the US dollar, despite a mixed market mood, in the American session on Friday. At the time of writing, the USD/MXN trades at 20.4218.

European and US equity markets fluctuate between winners and losers. At the same time, the dollar remains bid, with the US Dollar Index, a gauge of the dollar’s value against a basket of pairs, up 0.34% to 98.31, faltering in the weight of the USD/MXN pair. .

Overnight, the USD/MXN pair was moderate in the 20.50 area, without much movement, although as the North American session started, the pair fell through the European session lows around 20.4646, towards the lows area of 20.40.

USD/MXN Price Forecast: Technical Outlook

USD/MXN has a neutral bias and is testing the 200-day moving average (DMA), located at 20.4125. Relative Strength Index (RSI) is at 41.50, below the midline of 50, pointing lower, suggesting USD/MXN could be moving towards Feb 23 low at 20.1558, but would find some obstacles on the way to the south.

If that scenario plays out, the first support for the USD/MXN would be the 200 DMA. A break of the latter would expose 20.3117, which once cleared would pave the way for the Feb 23 daily low at 20.1558.

To the upside, the first resistance on the USD/MXX would be the 20.50 level. A decisive break would expose the 50 DMA at 20.5667, followed by the Jan 28 daily high at 20.9130 and then 21.00.

Technical levels