• Mexican peso ends two-day rally versus US dollar amid risk aversion on Wednesday.
• USD/MXN likely to face consolidation before next directional move.
• Primary trend remains bullish, but under 21.30 more losses could take place.

The USD/MXN is falling again on Thursday but it remains far from Wednesday’s low. It bottomed at 21.11 and then rebounded sharply, erasing most of the day’s losses. In the very short-term it remains with a negative bias, still facing volatility, although trading quietly on Thursday.  

Price is moving around 21.30, a key technical level. A consolidation below would keep the door open to more losses, with the next support levels at 21.15 and then the strong barrier at 20.90. A break of the support at 20.90, could be followed by more losses toward the uptrend line at 20.50.

On the upside, a firm recovery above 21.45 would alleviate the negative pressure. No signs of a resumption of the primary uptrend are seen at the moment. The USD/MXN seems to be forming a consolidation range likely between 21.15 and 21.65. Above 21.70, the 22.00 zone would be exposed.

Technical levels