USD/MXN Price Analysis: Under 20.20, could test the critical 20.00 zone

• Mexican peso gains momentum during US session, heads for the highest close since March.
• USD/MXN about to challenge the 20.00 strong barrier again.

The USD/MXN is falling on Thursday and recently dropped back under 20.20. If it remains at current levels, it will post the lowest daily close since March and should point to another test the 20.00 area.

The barrier around 20.00 is a strong support and also a psychological area. Volatility could rise if the price breaks below or even if there is a considerable rebound. Two weeks ago, USD/MXN jumped to 20.65 after reaching 20.00.

The main trend in the pair is bearish. A break under 20.00 is needed to clear the way to more losses with an immediate target at 19.75/80. The perspective will remain intact as long as it trades under 21.70.

A recovery above 20.50 in USD/MXN could lead to a test of the 20.70/80 resistance band (horizontal and convergence of the 20 and 55-day moving averages). A consolidation above 20.80 would alleviate the bearish pressure.

USD/MXN daily chart