• USD/MXN rises for the third consecutive day amid global growth concerns.
• Rally faces strong resistance near 20.20, reinforced by the 100-day SMA.
• Next upside target at 20.45.

Emerging market currencies are under pressure, affected by higher interest rates. The Mexican peso was among the top performers last week, after Banxico’s 75 bps rate hike.

The USD/MXN is rising for the third consecutive day and is facing a resistance at the 20.20 area that also contains the 100-day Simple Moving Average. A firm break above should open the doors to 20.45, the next relevant resistance.

Technical indicators offer no clear signs at the moment. RSI and Momentum are flat. Some consolidation between 20.20 and 20.00 seems likely before the next directional move.

A decline back to 20.00 should be seen as a normal correction after the rally from 19.80 to 20.20. If USD/MXN drops under 20.00, the Mexican peso should strengthen favoring an extension toward the weekly low at 19.81. The key support below is the 19.70 area that if reached, could likely trigger a rebound.

USD/MXN daily chart