Over the past five trading sessions, the USD/MXN pair has declined by more than 2%, as the Mexican peso continues to gain ground against the U.S. dollar. This bullish trend in the peso is partly driven by the ongoing weakness in the U.S. dollar, as reflected in the DXY index, which has fallen to 99 points, its lowest level in the past year.
The dollar’s weakness stems from the growing political and economic uncertainty generated by the global trade war, triggering a broad wave of dollar selling as capital exits the U.S. If this trend continues, the Mexican peso could maintain its bullish momentum in the short term.
Lateral Range Breakout
Since November 2024, USD/MXN had been trading within a sideways range, with resistance at 20.94 pesos per dollar and support at 20.00. In recent sessions, bearish pressure broke through this support, and as selling momentum builds, this could mark the start of a more meaningful downtrend.
MACD
The MACD histogram remains below the neutral zero line, indicating strong bearish momentum based on recent moving average trends. If the histogram continues to show deeper negative values, selling pressure could intensify further in the short term.
RSI
Currently, lower lows in price and higher lows in the RSI suggest the presence of a bullish divergence—an imbalance in recent selling momentum. This could create an opportunity for short-term bullish corrections to emerge.
Key Levels to Watch:
Written by Julian Pineda, CFA – Market Analyst
The dollar’s weakness stems from the growing political and economic uncertainty generated by the global trade war, triggering a broad wave of dollar selling as capital exits the U.S. If this trend continues, the Mexican peso could maintain its bullish momentum in the short term.
Lateral Range Breakout
Since November 2024, USD/MXN had been trading within a sideways range, with resistance at 20.94 pesos per dollar and support at 20.00. In recent sessions, bearish pressure broke through this support, and as selling momentum builds, this could mark the start of a more meaningful downtrend.
MACD
The MACD histogram remains below the neutral zero line, indicating strong bearish momentum based on recent moving average trends. If the histogram continues to show deeper negative values, selling pressure could intensify further in the short term.
RSI
Currently, lower lows in price and higher lows in the RSI suggest the presence of a bullish divergence—an imbalance in recent selling momentum. This could create an opportunity for short-term bullish corrections to emerge.
Key Levels to Watch:
- 20.33 pesos per dollar: A key resistance level, aligned with the 100-period moving average. A return to this area could reactivate the previous range.
- 20.00 pesos per dollar: Another important resistance, now acting as a potential retest zone after previously serving as support. This could be a target for short-term pullbacks.
- 19.33 pesos per dollar: A significant support level, aligned with the neutral zone from September 2024. A move toward this level could reinforce the consolidation of a consistent bearish trend in upcoming sessions.
Written by Julian Pineda, CFA – Market Analyst
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.