USD/MXN Price Analysis: Bearish outlook, testing 2022 lows

• Mexican peso rises versus the US dollar for the third time in a row.
• USD/MXN stays bearish, looking at 2022 lows near 19.70.
• The 19.90 area is not the immediate resistance.

The USD/MXN keeps a bearish tone and continues to move lower at a slow pace, as equity markets recover. A few minutes ago, the Bank of Mexico released the minutes of its latest board meeting. The central bank could act more forcefully to curb inflation according to the document. Members noted inflation expectations have increased significantly.

The move lower in USD/MXN faces a strong barrier around 19.70/75 that contains many horizontal support levels and the 2022 low. A consolidation below should open the doors to a slide to the next critical support at 19.50/55.

If the pair remains above 19.75, the odds of a rebound will increase. A recovery to 19.90 should be seen as a modest correction, keeping the bearish tone intact. Above, at 20.10 awaits the 20-day Simple Moving Average. A daily close above should negate the bearish short-term outlook.

Technical indicators continue to favor the downside in USD/MXN. The RSI is still above 30, but it is flattening; Momentum remains below 100, now again pointing south.

USD/MXN daily chart