- USD/MXN gains traction for the fourth day in a row on Tuesday.
- The immediate resistance level is located in the 17.30-17.35 region; initial support is seen in the 17.00-17.05 zone.
- The Relative Strength Index (RSI) is above 50, in a bullish zone.
The Mexican Peso (MXN) extends its slide against the US Dollar (USD) during the early hours of the European session on Tuesday, as the Bank of Mexico will reduce its currency hedging program to tame volatility in the market. The USD/MXN pair is currently trading around 17.25, gaining 0.45% on the day.
Based on the daily chart, the USD/MXN pair is holding below the key 100 day EMA, which means that a further decline looks favourable. Therefore, the pair could run into the immediate resistance level in the 17.30-17.35 region, which represents the upper bound of the Bollinger Bands and the 100 day EMA. Additional bullish filter to watch is near a round psychological level and the May 24 high at 18.00. Higher up, the next barrier stands at 18.20 (April 27 high) and finally at 18.40 (April 5 high).
On the opposite side, the initial support level is in the 17.00-17.05 zone. This level is a confluence of the Bollinger Bands midline, a psychological round level, and the 50 day EMA. Any prolonged weakness below this latest level will challenge critical support in the 16.60-16.70 region, which represents the lower bound of Bollinger Bands and the yearly low. Further down, the pair will drop to the round 16.00 level.
It is worth noting that the Relative Strength Index (RSI) is sitting above 50, well within bullish territory, suggesting that buyers will likely remain in control.
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.
