USD/MXN pair is likely to consolidate lower towards 20.50 - SocGen

Research Team at Societe Generale notes that the USD/MXN tested daily channel limit at 20.10 which is also the 382% retracement from November lows and has shown a rebound.

Key Quotes

“Since November, the pair appears to be evolving within a sideways range and is now approaching close to the upper bound at 21/21.30 which more importantly is the upward sloping channel drawn since 2008.”

“Long dated indicators are toppish and are diverging negatively suggesting 21/21.30 as a decisive level. Only a definite break above will mean possibility of further up move. Short term, the pair is likely to consolidate lower towards 20.50, the 50% retracement of recent rebound with next support at 20.10.”