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  • USD/MXN heads for the third daily close near the 19.00 zone.
  • The pair is moving sideways in the short-term, consolidating after falling 10% from mid-June to mid-July.

The USD/MXN is moving sideways near the 19.00. On Monday the pair peaked at 19.16, the highest level in almost two weeks but then pulled back to the 19.00 area. The retreat from the highs took place despite US dollar strength.

The Mexican peso remained firm despite trade tensions. On Thursday, NAFTA trade talks will resume. The Mexican delegation includes current negotiators and those that will be designated by president-elect Andrés Manuel López Obrador.

Technical outlook

USD/MXN is consolidating after the slide from levels near 21.00 found support at 18.80. That area is the key support to the downside. A daily close below would clear the way for an extension of the bearish move with potential targets at 18.70 and 18.60. Below the last one, a very strong support area is seen at 18.45.

To the upside, the key short-term resistance is seen at 19.15 (horizontal level and also the 100-day moving average): a consolidating on top would clear the way to more gains. The next strong barriers are seen at 19.30 and 19.50.

As long as the pair remains between 19.15 and 18.80, the consolidation mode will prevail, with technical risks tilted to the downside.