- USD/MXN recovers some ground after dropping to weekly lows of 18.8231.
- Despite the ongoing upward correction, the USD/MXN is still downward biased.
- USD/MXN: Failure to crack 19.0000 could exacerbate a retest of the YTD lows of 18.50.
The Mexican peso (MXN) is losing ground against the US Dollar (USD) after recovering some ground on Tuesday, following “dovish” perceived remarks by the US Federal Reserve (Fed) Chair Jerome Powell. The USD/MXN dropped from around 19.1783 towards the week’s lows at 18.8691, but on Wednesday, the buck is recovering. At the time of writing, the USD/MXN exchanges hands at 18.9475, above its opening price by 0.17%.
USD/MXN Price Analysis: Technical outlook
Before Wall Street opened, the USD/MXN pair was trading at around the day’s lows, around 18.8231. However, a risk-off impulse increased demand for the US Dollar, so the USD/MXN is moving upwards.
The USD/MXN daily chart suggests further downside is expected, but the ongoing correction could open the door for further gains. At the time of typing, the USD/MXN has broken the 20-day Exponential Moving Average (EMA) at $18.9134 and could extend its gains towards 19.0000, a psychological resistance. A breach of the latter and the USD/MXN could rally toward January 19 daily high at 19.1085.
For the resumption of the downtrend, the USD/MXN needs a break below the 20-day EMA at 18.9134. Once cleared, that would expose critical support levels. Firstly, the February 7 low of 18.8691, followed by the day’s low at 18.8231, and then the YTD low at 18.50
USD/MXN Key Technical Levels
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