USD/MXN Price Analysis: Tests $18.65 as a falling wedge emerges

• Long-term, the USD/MXN remains downward biased, as it got rejected at the 50-hour EMA.
• USD/MXN, on an intraday basis, formed a falling wedge, suggesting that buyers are gathering momentum.

The USD/MXN recovered some ground on Monday after last week’s Banxico decision to raise rates by 50 basis points (bps) interest rates to the 11% threshold spurred a bid in the Mexican Peso (MXN). At the time of writing, the USD/MXN exchanges hands at 18.6517, above its opening price by a slight margin of 0.03%.

From a daily chart perspective, the USD/MXN is still downward biased, as the daily moving averages (MAs) remain above the spot price. Even though the USD/MXN paired some of last Friday’s losses, the USD/MXN pair remains under selling pressure, and it could shift neutral if the USD/MXN breaks resistance at the 50-day Exponential Moving Average (EMA) at 19.0805.

Oscillators like the Relative Strength Index (RSI) point downwards and in bearish territory, so further downside is expected.

On an intraday basis, the USD/MXN 1-hour chart suggests the pair might consolidate in the 18.50-19.00 area, unable to crack support/resistance levels.

A falling wedge is forming as the pair bottoms at around the $18.60 area, which would exacerbate an upward move in the USD/MXN, though there are some key resistance levels that buyers need to battle, to lift the USD/MXN exchange rate towards $19.00.

A break above the 20-period Exponential Moving Average (EMA) at 18.6768 would send the USD/MXN pair toward 18.7336., which, once cleared, would open the door for further gains toward the 100-EMA at 18.7945 and the 200-EMA at 18.8273.

USD/MXN 1-Hour chart

USD/MXN Key technical levels