- The Mexican peso rises against the dollar for the third day in a row.
- USD/MXN remains bearish, eyeing 2022 lows near 19.70.
- The 19.90 area is not immediate resistance.
The USD/MXN maintains a bearish tone and continues to decline at a slow pace, while stock markets recover. A few minutes ago, the Bank of Mexico published the minutes of its last meeting. According to the document, the central bank could act with more force to curb inflation. Members noted that inflation expectations have risen significantly.
USD/MXN move lower faces a strong barrier around 19.70/75 containing many horizontal support levels and the 2022 low. A consolidation below should open the doors for a drop to the next critical support. at 19.50/55.
If the pair sustains above 19.75, the chances of a bounce will increase. A recovery to 19.90 should be seen as a modest correction, keeping the bearish tone intact. Above, at 20.10, the 20-day simple moving average awaits. A daily close above should negate the short-term bearish outlook.
Technical indicators continue to favor USD/MXN on the downside. RSI is still above 30 but is flattening out; Momentum is still below 100, now heading south again.
USD/MXN daily chart
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Technical levels
Source: Fx Street
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