USD/MXN Price Analysis: Still bullish, capped by the 200-day SMA
- US dollar corrects lower across the board, trend remains positive.
- Mexican peso’s recovery limited so far.
- USD/MXN to gain momentum if it rises above 20.40.
The USD/MXN is about to erase all losses and is back near a critical technical level, showing that the strength is still in the dollar. The correction from the one-month hit it reached on Thursday at 20.63, extended to 20.28. Later the pair rose back to the 20.40 area.
Despite the correction and the failure of the USD/MXN to hold clearly above 20.40, risks remain to the upside. At 20.45, the 200-day Simple Moving Average (SMA) stands, a daily close above should clear the way to more gains. The next strong resistance is seen at around 20.70.
On the downside, the USD/MXN could drop even further to 20.20 without changing the bullish bias. The 20.15/20.20 zone could be seen as an opportunity to buy the pair again. A break lower would expose the 20-day SMA at 20.07. A slide back under 20.00 would negate the short-term bullish outlook, leaving the dollar vulnerable.
The weekly chart shows USD/MXN far from the peak (a positive for the MXN) and the 20-week SMA (a relevant technical level) is at 20.44.
USD/MXN daily chart
-637868421513691481.png)
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.
