Technical Analysis – Will USDMXN extend its uptrend?

• USDMXN holds near November’s two-year high
• Price trades within bullish channel; eyes on 21.00

USDMXN recouped almost half of its four-year downtrend from the pandemic's top, and the positive trajectory could further strengthen following the latest bounce on the 20-day simple moving average near 20.20.

Although Trump’s tariff threats helped the US dollar to steal ground from the Mexican peso, the bulls couldn't surpass November's two-year high of 20.79. Nevertheless, with the RSI and the stochastic oscillator sloping upward some distance below their overbought levels, and the MACD edging above its red signal line, the bulls may keep fighting. 

A break above the 21.00 number, which overlaps with the 50% Fibonacci retracement of the 2020-2024 downtrend, could be the key for an exponential rally toward the March 2022 resistance near 21.50. Even higher, the pair could re-examine the 21.90-22.00 region where the 61.8% Fibonacci mark blocked the November 2021 rally.

Should positive sentiment fade out, the 20-day SMA and September’s bar of 20.15 could again provide a helping hand to the bulls. If not, then the sell-off could stretch toward the 50-day SMA and the lower band of the short-term bullish channel at 19.72. A violation there could cause a sharp correction toward the 19.00 support territory.

In brief, the bullish trend in USDMXN is not showing any cracks and could keep buyers' interest alive in the coming sessions, though some caution is required as the price is approaching the crucial resistance zone of 21.00.