USD/MXN rejected from above 20.50, holds in range

The Mexican peso managed to erase losses on Monday against the US dollar, on a quiet session in the forex market. USD/MXN traded above 20.50 but again, like it happened on Friday, it failed to hold and pulled back. 

The pair was about to end the day hovering around 20.40. It continues to trade in a range with a key short-term support at 20.20 and resistance at the mentioned 20.50 zone. Near 20.50, is also the 38.2% Fibonacci retracement of the rally that started the day of the US Presidential elections, and now also, where the 20-day moving average stands. 

MXN: The best of the last 30 days

The Mexican peso outperformed in the currency market during the last 30 days. It has been the best performer, among the most traded currencies. Against the US dollar, it recovered ground after falling to record low levels.

A month ago, USD/MXN was testing levels on top of 22.00 but then started a correction. From those highs, it has fallen more than 6% and erased all gains for the current year. 

The decline from the top so far was capped around 20.20. The area between 19.95 and 20.20 is a very strong barrier.  A break lower could open the doors to a more significant bearish correction. To the upside, a break above 20.80 could add strength to the US dollar for a re-start of the long-term bullish movement.