• Mexican peso lost strength after being unable to break 20.50.
• USD/MXN rebounded after hitting a fresh weekly low at 20.47.
• Rebound likely to weaken near 20.70.

The USD/MXN is rising on Wednesday after falling sharply during the previous two trading days when it corrected from levels near 21.00 to 20.47. The Mexican peso was rejected twice from under 20.50, showing difficulties in extending the rally.

The key support area is 20.50 and a daily close below would point to more losses, targeting 20.35. A decline below 20.35 should clear the way for a new test of the critical area of 20.25/20.30 that includes the 200-day simple moving average.

The current move to the upside will likely face resistance near 20.70. The mentioned level is a critical short-term resistance. A break above would expose the next obstacle seen at 20.85/90.

On the weekly chart, the USD/MXN is still in negative despite Wednesday’s gains. The weekly chart shows the 20-week simple moving average at 20.60; a close above would keep the doors open for 21.00.

USD/MXN Daily chart