USD/MXN could extend downward correction towards 19.56 – Natixis

According to Nordine NAAM, Research Analyst at Natixis, the technical configuration has deteriorated sharply for USD/MXN since the pair failed to break out above 22.05 mid-January, with notably the development of a descending channel in the daily chart, while weekly indicators have turned bearish. 

Key Quotes

“In this context, a recovery back above the resistance level around 20.3420-20.3570 (daily Bollinger moving average) is unlikely. Watch out rather for a further consolidation of the USD/MXN. Keep an eye on the support at 19.56 (9-month moving average): if it does not hold, this will open the way down towards 19.1915 (50-week moving average) before 19.02 (ascending resistance trendline) and even 18.70 (lower band of weekly Bollinger). Resistance levels are located at 20, around 20.3420-20.3570, at 20.8620, at 21.54 and at 22.05.”