USD/MXN Price Analysis: Rallies sharply above $18.30 as the Mexican Peso sinks on risk-off

• Risk aversion bolstered the USD/MXN toward new weekly highs above $18.30.
• USD/MXN Price Analysis: The daily close above the 20-day EMA opened the door toward $18.60.

The Mexican Peso (MXN) is under pressure on Thursday; after reaching new 5-year lows at 17.8967, the USD/MXN has risen back towards the 18.0800 area. At around the Wall Street close, risk aversion pushed US equities lower, while the Mexican Peso depreciated the most since February 6, 2023. At the time of writing, the USD/MXN is gaining 2.07%, or 3700 pips, at 18.3323.

Also read: USD/MXN advances above the 18.00 figure as traders rush to safety

USD/MXN Price action

The USD/MXN stages a recovery after trading below the $18.00 barrier during the last few days. Earlier in the day, I wrote, “Nevertheless, USD/MXN bulls are far ahead of declaring victory. They must reclaim the weekly high at 18.1788, followed by the 20-day Exponential Moving Average (EMA) at 18.2898.” Later in the session, USD/MXN bulls reclaimed those levels as the exchange rate rests comfortably above the 20-day EMA. Additionally, Thursday’s close for the USD/MXN was 18.3483, which has opened the door for further upside.

That said, the USD/MXN first resistance would be the new weekly high of 18.4391. A breach of the latter will expose the $18.50 barrier, closely followed by the 50-day EMA at 18.6410 and the 100-day EMA at 19.0105.

On the flip side, the USD/MXN first support would e the 20-day EMA at 18.3169. Once cleared, and the USD/MXN pair will dive towards the March 7 high turned support at 18.1788, followed by the $18.00 psychological level.

USD/MXN Daily chart

USD/MXN Technical levels