USD/MXN has traded on the back foot in recent days, falling close to 3% from its October high amid positive sentiment and EMFX strength. However, the sell-off was stopped in its tracks on Thursday, as price failed to breach cluster support in the 20.15/20.20 area, as buyers resurfaced to bid the U.S. dollar higher. From those levels, we have seen a moderate bounce, which has taken the pair above 20.30, and much closer to critical resistance at 20.45, a technical barrier that has halted the price’s ascent on numerous occasions back in September.
At the moment, USD/MXN maintains a positive bias as it remains above its 50-day and 200-day moving average, but to rejuvenate the kind of upside pressure seen late last month, price would need to climb decisively above 20.45 in the coming sessions. A move above this mark would be a bullish signal and could certainly attract new buyers, paving the way for a rally towards the monthly highs in the 20.90 region.