USD/MXN Price Analysis: Mexican peso strengthens, faces strong barrier near 19.80

• USD/MXN drops for the seventh day in a row, shows some exhaustion signs.
• Technical indicators favor the Mexican peso, with strong support at 19.80.

Market optimism and a weaker US dollar continue to be the relevant drivers of the move lower in USD/MXN. It bottomed at 19.85, the lowest in three weeks, on Friday after the NFP. It then rebounded modestly, resuming the downside on Monday.

Despite the new decline, USD/MXN trades above the 19.80 support area. A break lower would clear the way to more losses, with the next support levels at 19.70 and 19.55.

After falling for many days, some exhaustion signs are emerging. Still the bias point to the downside. A bullish correction while under 20.10, would keep the downside bias intact.

A close above 20.10 should point to more gains ahead. The USD/MXN would have recovered key moving averages. The next resistance is seen at 20.20, with a daily close above favoring a test of the 20.40 area.

USD/MXN daily chart