- USD/MXN struggles to extend two-day uptrend as steady RSI joins five-week-old horizontal resistance to prod buyers.
- Convergence of previous resistance line from March 20, one-month-old ascending support line challenges Mexican Peso bulls.
- Bullish MACD signals, sustained trend line breakout keeps pair buyers hopeful.
USD/MXN treads water around 18.13 ahead of Wednesday’s European session as traders seek more clues to extend the previous two days’ recovery moves.
That said, the Mexican Peso (MXN) pair crossed a fortnight-long descending trend line the previous day and convinced buyers amid bullish MACD signals.
However, an area comprising the 50-SMA and multiple tops marked since early March challenges the USD/MXN bulls afterward around 18.20. Also raising doubts about the quote’s further upside is the steady RSI (14).
Hence, the pair’s further upside momentum needs to cross the 18.20 hurdle to convince bulls, which in turn highlights a nine-week-old resistance zone surrounding 18.50-55.
On the flip side, the previous resistance line from March 20 and an upward-sloping support line from early March together highlight 17.97 as a tough nut to crack for the USD/MXN bears.
In a case where the Mexican Peso buyers dominate past 17.97, the odds of witnessing a quick slump toward the April 2018 bottom of near 17.93 can’t be ruled out. Following that, the August 2017 low of around 17.57 will be in focus.
Overall, USD/MXN portrays bearish consolidation as the market awaits the key US activity and job numbers.
USD/MXN: Four-hour chart
Trend: Further upside expected
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