USD/MXN rebounds from monthly lows toward 20.70

• The Mexican peso is among the worst performers on Monday.
• USD/MXN rises after three consecutive daily declines.

The USD/MXN posted on Friday the lowest close since mid-November. On Monday the pair is rising ending a three-day negative streak. The rebound is a normal correction so far, as the bias continues to point to the downside.

The Mexican peso remains unable to benefit on Monday from a weaker dollar amid a rally in Wall Street and in commodities. The WTI is rising 1.20% above $74.50, gold and silver trade at weekly highs, and the SP500 is up by 0.75% at a new record high.

The improvement in risk sentiment should weaken the USD/MXN but is not the case at the beginning of the last week of 2021. No relevant economic reports are due over the next days.

Short-term outlook  

From a technical perspective, the bearish bias still prevails. The USD/MXN has a strong support around 20.45/50, a horizontal level and also the 100-day simple moving average. A break lower should add more negative pressure to the pair.

On the upside, the immediate resistance is located around 20.70 followed by the 20.90 region. Then comes 21.00, where the 20-day simple moving average stands. A daily close above should be a positive development for the dollar.

Technical levels