USD/MXN Price Analysis: Mexican peso could test 20.05 if remains under 20.25

• USD/MXN drops for the third day, amid an improvement in market sentiment.
• Negative bias while under 20.25, next support at 20.05.
• Key resistance at the 200-day SMA at 20.42.

The USD/MXN is falling for the third consecutive day. It bottomed at 20.13, the lowest level in a week. It is hovering around 20.19, off lows. The break under 20.00 triggered more losses.

Technical indicators in the daily chart show the RSI and Momentum moving south, supporting a negative bias in the very short-term. If USD/MXN remains under 20.25, the doors for a slide to 20.05 will remain open.

A rebound back above 20.25 would alleviate the bearish pressure. The next key level is the 200-day Simple Moving Average awaits near 20.42. If it continues to rise, attention would turn again to the 20.70 area.

Last week the 20.70 zone capped the upside. A break higher would clear the way for a test of a downtrend line at 20.80. Above a visit to 21.00 and more seems likely.

USD/MXN daily chart