- USD/MXN falls and approaches a multi-year low at 17.93.
- Limited bullish momentum for USD/MXN on Fed pause signal.
- The Relative Strength Index points to further falls for the USD/MXN.
He USD/MXN experiences a corrective movement of several months, taking the price to 18.30 at the start of the European session on Tuesday. The pair has been consistently heading lower after hitting a March high at 19.23, which intersects the downtrend line coming from the July high around 21.00 on a daily time frame.
If the downtrend continues, The pair is likely to retest the multi-year low at 17.93. The Federal Reserve (Fed) signaled a pause in its path of rate hikes, together with the current injections of dollar liquidity and the relief of bank adversity, which could push the pair to break below the critical level of 17.93.
Any upside momentum will be capped around the 21-day SMA, which currently coincides with Monday’s high at 18.44.. A break above this level would lead USD/MXN to challenge the 50-day SMA, which lines up with support turned resistance at 18.57.
Breaking above these levels would require significant bullish momentum for the US dollar to retest the March high in 19.23.
The Relative Strength Index points to lower lows, suggesting further downside potential for the pair.
Market participants are focused on the upcoming US Personal Consumption Expenditure (PCE) data release on Friday and Banxico’s interest rate decision on Thursday.
USD/MXN daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
