USD/MXN jumps from YTD lows around $src8.33 and climbs to src8.40.
USD/MXN Price Analysis: Positive divergence remains, which could pave the way for a recovery.
The USD/MXN bounces after hitting multi-year lows around src8.330src, snapping three days of consecutive losses. Nevertheless, the USD/MXN would remain pressured after a strong downtrend dragged prices from the last year’s $2src.05 peak toward the above-mentioned $src8.33 area. At the time of writing, the USD/MXN exchanges hand at src8.4076, above its opening price by 0.25%.
Technically speaking, the USD/MXN daily chart portrays a bearish continuation as the most likely scenario. However, the divergence between the USD/MXN price action and the Relative Strength Index (RSI) remains intact, which would spur a reversal that might open the door for the USD/MXN buyers to reclaim the $src9.00 psychological level. This means as price action registered lower lows, the RSI has not. Therefore, risks for a reversal remain, which would open the door for further USD/MXN upside.
For that scenario to play out, the USD/MXN needs to crack the confluence of a downslope-resistance trendline and the 20-day Exponential Moving Average (EMA) at src8.695src, followed by the February src5 daily high at src8.7479, followed by the 50-day EMA At src8.9669, ahead of the src9.0000 psychological price level.
The USD/MXN must conquer the src8.4000 mark for a bearish continuation. Once cleared, that will expose the YTD low at src8.330src, followed by the psychological $src8.00.
USD/MXN Daily chart
USD/MXN Key technical levels
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