USD/MXN Price Analysis: Strong barrier around 20.45 intact
- US dollar jumps and then makes a full pullback.
- Mexican peso gains on risk appetite. Banxico's decision due on Thursday.
- USD/MXN upside capped by 20.45, testing the 20-day SMA.
The USD/MXN made a run to 20.46 after the release of US inflation data, reaching the highest level in a week. Then, amid a general reversal of the US dollar, it pulled back all the way down back and printed a fresh daily low at 20.21, slightly above the 20-day Simple Moving Average (SMA).
The 20-SMA at 20.20 is the immediate support level and a break lower should clear the way for a test of an uptrend line at 20.08. Below the line, there is not much support until the May low at 19.99, also a critical horizontal level.
The daily RSI and the Momentum turned south, suggesting some strength ahead for the Mexican peso that would be confirmed with a daily close under 20.20.
If USD/MXN remains above 20.25, a new test of 20.45 would remain on the table. The area around 20.45 also contains the 200-day SMA. A consolidation above should clear the way for more gains above the 20.50 horizontal resistance. The next significant barrier is seen at 20.70.
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.
