USD/MXN extends rebound from 3-month lows

The Mexican peso is falling for the four day in a row against the US dollar. USD/MXN  continues to recover after bottoming last week at 17.89, hitting the lowest level since June 12.

The pair was rejected from levels under 18.00 and started a bullish correction amid a stronger US dollar. Today the decline in crude oil prices gave another boost to the upside. USD/MXN moved all day with a bullish bias and peaked at 18.36. A daily close on top of 18.30 could add support to the US dollar favoring a continuation of the recovery.  To the upside, the next relevant resistance levels might be seen at 18.45 and 18.70.

Technical indicators in the short-term continue to point to the upside. The 4-hour chart shows price holding on top of key moving averages and also the 20-SMA is about to cross the 55-SMA. If the pair drops below 18.30, the Mexican peso could gain momentum.

Mexican GDP

Today economic data from Mexico, showed that the economy contracted by 0.2% during the second quarter, slightly above consensus forecast of a 0.3% decline. The annual rate fell from 2.5% to 1.5%.