USD/MXN Price Analysis: A test of 20.55 seems likely

• Technical indicators are modestly biased to the upside in the short-term in USD/MXN.
• Pair needs to break and hold above 20.55 to clear the way to more gains.

The USD/MXN is falling on Thursday after hitting on Wednesday a two week high at 20.52. The bullish bias in the near term is still intact, while at the same time the dominant trend still points south.

The pair is correcting to the upside from the main bearish trend, after finding support at 20.25/30. A decline below 20.35 should point to a new test of the critical area of 20.25/20.30 that includes the flat 200-day simple moving average.

On the upside, daily close above 20.55 (100-day SMA) should strengthen the US dollar. The next resistance stands at 20.70 and then at 20.90.

The weekly chart showed the 20-week SMA at 20.53; a close above would be a negative development for the Mexican peso, suggesting a potential bottom has been established.

USD/MXN daily chart