Economists at Société Générale analyze USD/MXN technical outlook.
Cross above 200-DMA near 17.00/17.20 crucial to avert one more leg of decline
USD/MXN has struggled to establish itself above the 200-day moving average (DMA) around 17.20 in its recent attempt, leading to a decline towards last year’s low of 16.60, which serves as a potential support level.
The daily Moving Average Convergence Divergence (MACD) indicator has shown positive divergence, indicating a decrease in downward momentum. However, clear signals of a reversal in the downtrend have yet to emerge.
A crucial development would be a cross above the 200-DMA near the 17.00/17.20 range, which could help prevent further downward movement.
Should the pair fail to hold above 16.60, the ongoing downward trend is likely to persist, with the next projected support levels at 16.40 and 16.10.
