USD/MXN Price Analysis: Bears flirt with 17.80 confluence resistance-turned-support

USD/MXN oscillates in a narrow trading band near a one-week trough touched on Wednesday.
The mixed technical setup warrants caution for bears and before positioning for deeper losses.
A sustained strngth beyond the 38.2% Fibo. level will set the stage for some maningful upside.

Haresh Menghani FXStreet

The USD/MXN pair trades on the backfoot during the Asian session on Wednesday and consolidates its recent losses to over a one-week low touched the previous day. Spot prices currently trade around the 17.80 region, down 0.10% for the day, flirting with a confluence resistance breakpoint comprising the 200-day Simple Moving Average (SMA) and a multi-month-old descending trend-line.

Meanwhile, technical indicators on the daily chart have been retreating from higher levels, though manage to hold in the positive territory. This makes it prudent to wait for a convincing break below the aforementioned resistance-turned-support before positioning for an extension of the recent pullback from mid-18.00s, or the highest level since late March touched last week. Some follow-through selling below the 17.65 zone, representing the 23.6% Fibonacci retracement level of the fall witnessed in July, will shift the near-term bias for the USD/MXN pair back in favour of bearish traders.

Spot prices might then accelerate the fall to the 17.40-17.35 horizontal support before dropping further towards the 17.15-17.10 intermediate support. The downward trajectory could get extended and drag the USD/MXN pair to the 16.90-16.85 area and the multi-year low, around the 16.65-16.60 region touched in July.

On the flip side, the 18.00 round figure now seems to act as an immediate hurdle ahead of the 18.15-18.20 zone. This is followed by 38.2% Fibo., around the 18.30 region and mid-18.00s, or the monthly. A sustained strength beyond will set the stage for the resumption of the recent appreciating move witnessed over the past month or so and lift the USD/MXN pair to the 18.80-18.85 area, representing 50% Fibo. level.

USD/MXN daily chart

Techincal levels to watch

USD/MXN

Overview
Today last price	17.8166
Today Daily Change	-0.0178
Today Daily Change %	-0.10
Today daily open	17.8344

Trends
Daily SMA20	17.5817
Daily SMA50	17.2943
Daily SMA100	17.2124
Daily SMA200	17.7823

Levels
Previous Daily High	17.9596
Previous Daily Low	17.7861
Previous Weekly High	18.4934
Previous Weekly Low	17.3786
Previous Monthly High	17.8174
Previous Monthly Low	16.9727
Daily Fibonacci 38.2%	17.8524
Daily Fibonacci 61.8%	17.8934
Daily Pivot Point S1	17.7605
Daily Pivot Point S2	17.6866
Daily Pivot Point S3	17.587
Daily Pivot Point R1	17.934
Daily Pivot Point R2	18.0336
Daily Pivot Point R3	18.1075

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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