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USD/MXN dropped to a new YTD low at 18.4975 during the session.
The US Dollar is extending its losses after a mixed US inflation report.
USD/MXN Price Analysis: To resume its downward bias if it achieves a daily close below $18.50.
The Mexican Peso (MXN) extended its gains against the US Dollar (USD) on Tuesday following the release of US inflation data, which showed that prices in the United States are slowing down. Therefore, speculators pricing in a less hawkish Fed sold the greenback vs. the peso. At the time of writing, the USD/MXN exchanges hand at 18.5115, below its opening price by 0.27%.
Technically speaking, the USD/MXN would continue to aim lower, as portrayed by the daily chart. After spiking to its daily high of 18.6729, the USD/MXN resumed its downtrend, which witnessed the pair dropping to fresh four and a half year low at 18.4975, a level last seen in August 2019. However, a bounce in that area trimmed some of the pair’s losses, sitting at around 18.50.
If the USD/MXN achieves a daily close below 18.50, that will exacerbate a fall towards August 7, 2018, at 18.4047, followed by a test of the $18.00 figure. In an alternate scenario, the USD/MXN’s first resistance would be the February 13 daily high of 18.7284. Break above would expose the 20-day Exponential Moving Average (EMA) at 18.8133, followed by the psychological barrier at 19.0000.
Oscillators, like the Relative Strength Index (RSI), suggest a bearish continuation, though a positive divergence is in the making, indicating that a reversal could be around the corner. The Rate of Change (RoC) portrays that although sellers are in control, momentum is fading.
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