- USD/MXN jostles with the 200-EMA, 100-EMA confluence to prod two-day downtrend.
- Bearish MACD signals, downbeat RSI (14) suggest further declines.
- Seven-week-old horizontal support appears tough nut to crack for bears.
- Buyers need successful break of multi-day-old resistance line for conviction.
USD/MXN bears take a breather around 18.60 during early Wednesday as market players await the Federal Open Market Committee (FOMC) monetary policy meeting outcome.
Even so, the Mexican Peso (MXN) pair prints mild gains while snapping the previous two-day losing streak at the lowest levels in a week.
That said, the convergence of the 100-bar Exponential Moving Average (EMA) and the 200-EMA restricts the immediate downside of the USD/MXN pair.
However, the bearish MACD signals and downbeat RSI (14), not oversold, keeps sellers hopeful of breaking the 18.60 support confluence.
It’s worth noting, though, that an area comprising multiple levels marked since early February, around 18.50, appears a tough nut to crack for the USD/MXN bears and could restrict the pair’s further downside past 18.60, which if ignored won’t hesitate to portray a slump towards 18.00.
It’s worth noting that the mid-March swing low joins the early March peaks to highlight the 18.25-20 region as an extra filter towards the south.
On the flip side, the USD/MXN pair’s rebound from the current levels can again aim for the 19.00 round figure before marking one more battle with a descending resistance line from early January, close to 19.20 at the latest.
Overall, USD/MXN is likely to remain pressured even if the room towards the south appears limited.
USD/MXN: Four-hour chart
Trend: Limited downside expected
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