USD/MXN Price Analysis: A correction to 19.00 is on the cards
- Mexican Peso holds bullish tone against the US Dollar.
- USD/MXN’s technical indicators point to a correction or a consolidation.
- Consolidation below 18.70 would open the doors to 18.50.
The USD/MXN is rising on Monday after hitting the lowest intraday level in almost three years at 18.73. A weaker US Dollar and a positive tone across financial markets are offering support the Mexican Peso and emerging market currencies.
The rebound on Monday was capped by the 18.85 zone, the confluence of a horizontal level, the 20-Simple Moving Average in four hours chart and a downtrend line. A break above would open the doors to a deeper bullish correction in line with some technical indicators. The next resistance is seen at 18.90 before the more important zone of 19.00/05 which should limit the upside.
In the short-term, technical indicators favor a stabilization. Momentum is well below midlines but pointing to the upside. RSI is at or near oversold levels and MACD shows some potential for a deeper correction.
The main trend for USD/MXN is bearish. The downside so far has found support at the 18.70/75 zone. A break lower would clear the way to more losses, targeting the 18.50 zone.