USD/MXN rebounds from weekly lows to 23.85

• Mexican peso slides on Monday despite OPEP+ cut agreement. 
• USD/MXN gains after falling during five consecutive days. 

The USD/MXN pair rose for the first time in a week but it was about to end far from the top. As of writing, it was hovering around 23.60, 1.4% above Friday’s close.

At the beginning of the week, the pair dropped to 23.21, hitting the lowest level since March 27 following then agreement from major oil producers to cut output by nearly 10 million barrel. Mexico will cut output by 100,000 bps something that could be seen as a victory for President Andres Manuel Lopez Obrador considering that OPEC+ asked for a larger cut of around 400,000 bpd. 

The strength of the Mexican peso, like crude oil prices, did not last on Monday. USD/MXN broke above 23.50 and jumped to 23.85, the highest level since Thursday. It then pulled back as commodity and emerging market currencies gained versus the greenback. 

Technical outlook 

Despite rising on Monday, USD/MXN short-term trend still shows some bearish bias. Price lost momentum near the 20-day moving average that stands at 23.95. The area around 24.00 is also a horizontal resistance, so as long as it remain below, a test of the weekly lows at 23.20 could be seen. Under the mentioned level, the next critical support stands at 22.85.