The USD/MXN is falling again on Wednesday but the Mexican peso is offering some signs of exhaustion. Still, while under 21.30, the pair could drop further to the 20.90 area, where the next strong support is seen.
A recovery back above 21.30 should give an indication that the bearish correction could have run its course, suggesting some consolidation between 21.30 and 21.65. On the contrary, a break under 20.90 should strengthen the outlook for the MXN, exposing the next critical support located at 20.50.
The primary trend still favor the upside in USD/MXN. The sharp rally of last week looks exaggerated so the pullback taking place at the moment seems normal so far. Price is hovering around the 50% Fibonacci retracement of the latest rally.
A rally back above 22.00 needs volatility across financial markets and a much stronger dollar. Before that level, resistance is seen at 21.60, 21.75 and 21.90.
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