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  • Mexican peso drops sharply versus the US dollar on risk aversion.
  • USD/MXN short-term bias starts to point to the upside.

The USD/MXN is rising for the second consecutive day on Monday and reach 21.59, the highest levels since September 9. It is trading at 21.45, slightly below the 20-day moving average that stands at 21.52.

A daily close above 21.65/70 would negate the current short-term bearish bias, favouring a consolidation. The next resistance is seen at 21.80/85 (horizontal level and downtrend line from April high) followed by 22.25.

The Mexican peso needs to hold below 21.40/45 in order to keep the negative pressure under control 21.15/20 is the immediate support level to consider; below another test of 21.00 seems likely.

USD/MXN 4-hour chart