The USD / MXN bias favors an upward movement, with some consolidation likely to occur before the next step is greater. The main moving averages are starting to turn north, supporting the dollar.
USD / MXN traded flat on Monday, retreating from a monthly high that reached above 20.55 last week. The short-term trend is clearly pointing upwards and is currently trading at 20.40, in the same area of the nine-month falling line.
The price is kept above and far from the 20- and 55-day moving averages that turn north, supporting bullish bias. Both averages converge to the 19.95 zone which has become critical support. A fall below would mark the continuation of the long-term trend, which is now being tested.
Although above 20.15, the momentum will indicate further gains for the dollar. USD / MXN tests the trend line 20.40 and resistance 20.50. Above the next goal can be seen at 20.80.
The daily RSI is close to 70, suggesting that some consolidation is likely before a new step becomes higher, probably between 20.60 and 20.15.
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