USD/MXN Price Analysis: Mexican Peso retreat gets interesting below 16.83 resistance confluence

• USD/MXN defends week-start rebound from multi-year low, sidelined of late.
• Upbeat oscillators, sustained break of fortnight-old horizontal support favor Mexican Peso sellers.
• Convergence of 200-HMA, descending trend line from July 21 prods USD/MXN bulls.

USD/MXN remains sidelined near 16.75 during Tuesday’s Asian session, after bouncing off the lowest levels since late 2015 the previous day.

In doing so, the Mexican Peso (MXN) pair justifies the week-start run-up beyond the two-week-old horizontal resistance, now support around 16.70. Adding strength to the stated 16.70 resistance-turned-support is an ascending trend line stretched from late Friday.

That said, the bullish MACD signals and the upbeat RSI (14) line, not overbought, keeps the USD/MXN pair buyers hopeful.

However, a convergence of the 200-Hour Simple Moving Average (HMA) and a downward-sloping trend line from July 21, close to 16.83 by the press time, appears a tough nut to crack for the USD/MXN bulls.

In a case where the Mexican Peso sellers manage to break the 16.83 hurdle, the odds of witnessing a run-up towards the 17.00 threshold and then to the previous monthly high of around 17.40 can’t be ruled out.

On the contrary, a downside break of the 16.70 support confluence could recall the USD/MXN sellers. Even so, the latest swing low of around 16.62 can prod the Mexican Peso buyers before directing them to the October 2015 low of near 16.32.

USD/MXN: Hourly chart

Trend: Limited upside expected