USD/MXN Price Analysis: Recovery remains elusive below 18.16

• USD/MXN struggles to extend two-day rebound from multi-month low, sidelined of late.
• Failure to cross 50-EMA, one-month-old falling trend line recalls bears.
• One-week-long horizontal support area can restrict immediate downside.

USD/MXN retreats from intraday high, snapping a two-day uptrend, as it drops to 18.10 heading into Wednesday’s European session. In doing so, the Mexican Peso (MXN) pair fades the early-week rebound from the lowest levels since April 2018.

USD/MXN rose the most in more than a month the previous day on crossing the one-week-old horizontal resistance area surrounding 18.03-07. The recovery moves also surpass a downward-sloping trend line from February 06.

However, failure to cross a convergence of the one-month-long descending resistance line and 50-bar Exponential Moving Average (EMA), around 18.15-16 by the press time, recalled the USD/MXN bears.

Even so, the previous support line from early February, around 18.10 restricts the quote’s immediate downside ahead of the resistance-turned-support zone near 18.07-03.

Following that, the 18.00 round figure could prod the USD/MXN bears before directing them to the recently flashed multi-month low of 17.94.

On the contrary, a clear upside break of the 18.15-16 resistance confluence becomes necessary for the USD/MXN bulls to take entries.

Though, the Mexican Peso pair buyers remain off the table unless witnessing a clear upside break of the one-month-old horizontal resistance, around 18.50.

Overall, USD/MXN is likely to remain depressed even as the buyers managed to keep the reins in the last two days.

USD/MXN: Four-hour chart

Trend: Further downside expected