USD/MXN could test 18.00 for the first time since April 2018 – SocGen

The Mexican Peso has seen a total return of 9.7% vs. the US Dollar this year. Economists at Société Générale believe that the USD/MXN pair could break below the 18.00 level.

50-DMA at 18.85/19.00 is expected to cap

“USD/MXN rallied yesterday to 18.07 and a test of 18.00 could follow for the first time since April 2018.” 

“Daily MACD is within deep negative territory denoting an overstretched move. An initial rebound is not ruled out however 50-DMA at 18.85/19.00 is expected to cap. Holding below this hurdle, there is a risk of continuation in the decline.” 

“Next potential support zone is at 17.90/17.60, the 50% retracement of the whole 2008-2020 uptrend.”