After a quite decent decline from the peak of the 15th of June, USD/MXN found good support near the 18.790 zone. Since the 12th of July, that level continues to hold the rate from dropping further, this way signalling that the bulls see it as an important area, where they don’t want to let bears through. The pair is now sitting in a price range between the 18.790 and 19.174 levels, but the prevailing trend is still to the downside. Nevertheless, we will wait for a clear break and a close out of the range before we get comfortable with the future direction.
If the downside pressure remains present, USD/MXN could eventually break the lower bound of the range and make its way lower to the 18.600 support area, marked by the low of the 27th of April. If that area is not able to withhold the pair from declining further, then the next potential target could be the 18.420 hurdle, which, on the 20th of April, held the rate from dropping more.
Alternatively, if USD/MXN moves above the 18.965 line, this could lead to a test of the upper bound of the aforementioned range at 19.174, a break of which could open the door towards the next potential area of resistance at 19.285. If that doesn’t stop the pair from rising further, then we could see USD/MXN moving up towards the 19.560 level, marked by the high of the 4th of July.
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