- Mexican peso among worst performers on Tuesday.
- USD/MXN breaks above 20.00 and extends the rally.
- Outlook points to further gains for the USD while above 20.05.
The USD/MXN broke above 20.00/05 a few hours ago and jumped to 20.16, reaching the highest level since June 4. It is hovering near the top with the bullish tone intact, despite overbought readings in very short-term technical indicators.
The US dollar is rising for the third consecutive day, consolidating above the 20-day moving average and now looking to the 20.20 resistance area and the 100-day SMA at 20.23.
The area around 20.20/25 is the next critical resistance that should limit the upside, favoring a rebound. A break higher would suggest more gains ahead for 20.30. A daily close above 20.30 should clear the way to more gains, targeting 20.50.
If the USD/MX drops back under 20.00/05, the bullish pressure will ease. A daily close under 19.90 should put the bias in favor of the Mexican peso, while under 19.80, the next level is the recent low around 19.60.