Home USD/MXN tests levels on top of 19.20 amid a stronger US Dollar; MXN topped out?
FXStreet News

USD/MXN tests levels on top of 19.20 amid a stronger US Dollar; MXN topped out?

  • Mexican peso offers signals of exhaustion and retreats, the short-term range is being challenged.  
  • Stronger US Dollar and technicals pushed USD/MXN to the 19.20 zone.  

The Mexican peso approached weekly highs but changed its course and weakened signaling that the “no tariffs rally” might be over. The USD/MXN broke above 19.20 late on Wednesday and as of writing trades at 19.21, approaching Tuesday’s top.  

With the fear of tariffs behind, attention could turn to domestic factors in Mexico that could weight on MXN. Industrial production data for April in Mexica helped offset the current negative growth outlook after GDP contracted during the first quarter. Also, several rating downgrades last week damaged economic confidence. The agreement with the US helped confidence but it didn’t completely remove fears.  

Levels to watch  

The daily chart shows the pair holding below the 20-day moving average and still with a modest bearish bias. At the moment, USD/MXN is testing the upper limited of the current consolidation range between 19.10 and 19.20. The stabilization followed the dramatic decline after the announcement of the suspension of tariffs to Mexican imports.  

In the short-term, a firm move above 19.20 would point to more gains for the US Dollar and a potential test of 19.30, a key resistance level that if broken should clear the way to 19.50. On the flip side, a close under 19.10 is MXN positive and could lead to a test of 19.00 that protects the critical support of 18.90.  

 

 

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.