USD/MXN Price Analysis: Dollar at three-month highs, testing 20.50

• USD/MXN rises further to the 20.50 key area.
• Greenback strengthens across the board on Wednesday.

The combination of a stronger US dollar across the board and a somewhat weaker Mexican peso boosted the USD/MXN further to the upside. It is rising for the fifth consecutive day, trading at the highest level since mid-June.

The pair is consolidating above 20.40, reinforcing the bullish outlook. The next resistance stands at the 20.50/55 barrier and above the target might be located at the June top at 20.75.

Despite the extreme overbought reading in the short-term, no signs of a reversal or consolidation are seen yet and the strength of the US dollar still appears to have legs.

A daily close below 20.40 could point to some difficulties extending the move higher, but only a decline back under 20.15 should alleviate the bullish tone. If a correction brings USD/MXN below 20.00, the short-term outlook would favor the Mexican peso.

USD/MXN daily chart