USD/MXN Price Analysis: At monthly highs, 21.00 on the radar
- USD/MXN holds bullish bias, approaching testing resistance zone 20.85/90.
- Risk aversion weighs on the Mexican peso and other emerging market currencies.
- Slide under 20.60 needed to alleviate bullish pressure.
The USD/MXN is on its way to the highest weekly close since December. After rising back above 20.70, the dollar gained momentum and currently is testing the 20.85 resistance area. A break higher, if sustained above 20.90, could lead to a test of the following strong barrier seen at 21.05.
The 100-week moving average is seen at 20.92. A close clearly above would be a positive sign for the US dollar, for a potential extension to 21.35.
The RSI and momentum in the daily chart are pointing north, still not at extreme overbought levels. No signs of a correction are seen at the moment. If the USD/MXN fails to break above 20.85/90, the Mexican peso could experience a brief rally. Only below 20.60, the pressure is expected to ease.
The outlook favors more gains in USD/MXN, particularly with a close above 20.80. The risk aversion environment, which translates into a stronger dollar, also favors the upside from a fundamental perspective.
USD/MXN daily chart
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Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
