USD/MXN technical analysis: Surges to the highest level since early-Jan., bulls to take breather amid overbought conditions

   •  The Mexican peso was battered after the US President Donald Trump announced new tariffs on Mexico and pushed the USD/MXN cross to its highest level since early-Jan.

   •  A sustained move beyond a short-term descending trend-line, coinciding with 23.6% Fibo. level of the 20.6571-18.7472 downfall was seen as a key trigger for technical traders. 

Given the bullish breakout, a subsequent move beyond the very important 200-day SMA and 38.2% Fibo. level sets the stage for an extension of the strong positive momentum towards testing 50% Fibo. level hurdle near the 19.7010-15 region.

A follow-through buying might assist the cross to climb further towards reclaiming the key 20.00 psychological mark, albeit overbought conditions on hourly/daily charts warrant some caution before positioning aggressively for any further bullish move. 

On the flip side, 38.2% Fibo. level, around the 19.4700 level now seems to protect the immediate downside and is followed by 200-DMA, around the 19.3335 region, which if broken might prompt some long-unwinding trade and accelerate the corrective slide.

USD/MXN daily chart