• US dollar corrects lower across the board, short-term trend still bullish.
• USD/MXN in a consolidation range between 20.30 and 20.50.
• Above 20.50, the next resistance emerges at 20.70.

The USD/MXN is falling on Tuesday, moving in a consolidation range. The pair bottomed at 20.28, the lowest intraday level in a week and quickly rebounded back above 20.30. It is hovering around 20.36, looking again at the 20.40 level.

The main trend keeps pointing to the upside, although technical indicators on the daily chart, like the RSI, are turning to the downside. Price is around the 100 and 200-day Simple Moving Average, which stand around 20.45. A horizontal resistance is seen at 20.50, so a consolidation clearly above 20.50 should open the doors to more gains, initially targeting the 20.70 area.

Risks still appear to be tilted to the upside, but USD/MXN needs to break above 20.50 over the next sessions. A firm slide below 20.30 would strengthen the Mexican peso. The next support stands at 20.20 and then comes the 20-day Simple Moving Average at 20.13. Below this latter, the short-term bias will change to bearish.

USD/MXN daily chart

Technical levels