USD/MXN Price Analysis: Daily chart points to further gains, could test 22.00

• Mexican peso for the third consecutive day versus the US dollar, off monthly highs.
• USD/MXN starting to look overbought in the very short-term but bullish on the daily chart.

The USD/MXN continues to move higher. It resumed the upside after making a pullback to the 21.30 area. It is trading above 21.60 at the highest in two weeks. While the 4-hour chart is starting to show technical indicators at overbought levels (not yet signs of a correction or consolidation) the daily chart is looking more bullish every session.

If the upside continues, USD/MXN will face a strong resistance area between 21.70 and 21.90, where the 20-day moving average is seen, and also a horizontal resistance and downtrend lines. A consolidation above 22.00 would clear the way to more gains. The 50-SMA at 21.98 is a potential target of the current rally.

A failure at current levels should alleviate the bullish pressure of the pair. While a decline back below 21.30 would be a positive development for the Mexican peso.

USD/MXN daily chart