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  • The bias in the USD/MXN favors the upside, some consolidation likely before next move higher.
  • Key moving averages are starting to turn north supporting the greenback.

The USD/MXN is trading flat on Monday, retreating from the monthly high it hit last week above 20.55. The short-term trend points clearly to the upside and currently it trades at 20.40, in the same area of the nine-month downtrend line.

Price is holding above and far from the 20 and 55-day moving averages that are turning north, supporting the bullish bias. Both averages converge at the 19.95 zone that has become a critical support. A decline below would point to the resumption of the long-term trend, now being challenged.

While above 20.15, the momentum will point to further gains for the dollar. USD/MXN is testing 20.40 trendline and the 20.50 resistance. Above the next target is seen at 20.80.

The daily RSI is near 70 suggesting that some consolidation seems likely before another move higher, probably between 20.60 and 20.15.

USD/MXN daily chart