USD/MXN: Defence of 17.40 to result in a move higher towards the 200-DMA near 17.95/18.00 – SocGen

Economists at Société Générale analyze USD/MXN technical outlook.

Probing upper limit of previous base at 17.40

USD/MXN evolved within a base after reaching an intermittent low near 16.60 in July. It has recently broken above the upper limit suggesting a regain of upward momentum. This is also highlighted by daily MACD, which has been posting positive divergence and has recently crossed above the equilibrium line.

The pair bounced towards the descending trend line drawn since September 2022 at 17.73. A pullback is currently underway, however, the upper band of the base at 17.40 should provide support. Defence of this level is expected to result in a move higher towards the 200-DMA near 17.95/18.00.