- USD/MXN retreats from intraday high, snaps two-day losing streak.
- Three-week-old descending trend line restricts immediate upside ahead of the key SMAs.
- RSI pokes short-term resistance line during eight-day-long bearish trend, suggesting return of upside momentum.
- Rising support line from early March, YTD low joins downbeat RSI to challenge Mexican Peso buyers.
USD/MXN eases from the intraday high to 18.08 during the first positive day in three heading into Friday’s European session.
In doing so, the Mexican Peso (MXN) pair retreats from a downward-sloping resistance line from late March while fading the bounce off a five-week-old support line, marked the previous day.
Given the downward-sloping RSI (14), the USD/MXN weakness appears elusive. On top of that, the RSI line currently pokes an eight-day-long trend line resistance and hence a breakout can allow the momentum to improve, which in turn can trigger the pair’s rebound.
However, the 100-SMA and the 200-SMA levels, respectively around 18.20 and 18.32, can challenge the USD/MXN bulls. Also acting as an upside filter is the monthly high of 18.40.
It’s worth noting that the Mexican Peso buyers need validation from an upward-sloping support line from early March, around the 18.00 round figure, as well as from the RSI (14) that is currently weak.
Even if the USD/MXN price breaks the 18.00 support, the Year-To-Date (YTD) support near 17.89, marked in March, should lure the bears.
USD/MXN: Four-hour chart
Trend: Recovery expected