- USD/MXN is falling modestly on Tuesday, testing the 20.50/60 strong barrier.
- The negative very-short term bias differs from the positive perspective in the daily chart.
The USD/MXN is falling for the fourth time out of the last five trading days. It is testing the 20.50/60 support barrier that, so far it is preventing further weakness. The area is likely to hold, particularly in the current environment with mixed equities in Wall Street, US yields rebounding, and the greenback gaining momentum against majors.
If the pair breaks firmly under 20.50, the next target is the even more important support area at 20.35, the confluence of a horizontal level and the 100 and 55-day moving averages. If broken, the outlook for the Mexican peso would improve significantly and will likely test 19.90.
The rebound of USD/MXN from current levels could gain momentum for a rally toward 20.85/90, the next strong resistance. If the dollar recovers 21.00, a test of 21.50 will start to look like a not so distant possibility.
USD/MXN daily chart
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