USD/MXN Technical Analysis: Recovery capped by 20.25, consolidation continues

• Mexican peso recovers strength versus the US dollar.
• USD/MXN back under 20-day moving average and below 20.00.

The USD/MXN dropped sharply on Tuesday, and the Mexican peso is holding fir to those gains. The pair dropped after being unable to break 20.25 and tumbled to the 19.80 area from where it rebounded.

Ahead of the FOMC decision, USD/MNX holds a modest bullish bias. It needs to rise back above 20.00 to gain more momentum. The critical resistance on the upside is now seen at 20.25. A daily close would suggest more gains ahead.

The main trend continues to be to the downside in USD/MXN. Recent signs about exhaustion on the move lower have diminished but not disappeared. Strong barriers are seen at 19.70 and then at 19.45/50. If the last one is reached over the next sessions, it could trigger a rebound.

USD/MXN daily chart