USD/MXN: Failure to overcome 17.60 could lead to continuation in downtrend – SocGen

USD/MXN downtrend has extended after it struggled to overcome the 50-Day Moving Average (DMA) at 18.00 last month (now at 17.60). Economists at Société Générale analyze the pair’s technical outlook.

The decline is a bit stretched

The pair has recently revisited the trough of 2016 near 17.10 and is close to the lower limit of a multi-month descending channel. 

The decline is a bit stretched; an initial bounce is not ruled out however the MA near 17.60 must be overcome to affirm a meaningful up-move. Failure could lead to continuation in downtrend; next potential support levels are located at projections of 16.95 and 16.60/16.40.