Economists at Société Générale analyze USD/MXN technical outlook.

Risk of deeper decline if 200-DMA near 17.20 not overcome

USD/MXN has recently struggled to overcome the 200-DMA (now at 17.20) resulting in persistence of decline. It has retested last year low of 16.60 which is an interim support.

Daily MACD has started posting positive divergence denoting receding downward momentum but, move beyond the MA near 17.20 would be essential to confirm a meaningful up move.

In case the pair breaks 16.60, the phase of correction is likely to extend. Next potential objectives could be located at projections of 16.40 and 16.10.