Ella 
USD/MXN remains on the defensive during Wednesday’s Asian session, currently trading around the 17.0760-17.0755 area, which represents the 61.8% Fibonacci retracement of the pair’s rebound from August’s monthly swing lows. However, USD/MXN was able to hold above the two-week low hit on Monday and the 50-day simple moving average (SMA), which is located around 17.0235, ahead of the much-anticipated U.S. Federal Open Market Monetary Policy Committee (Fed) monetary policy meeting This moving average should be a key pivot level before resolution.
Meanwhile, the daily chart oscillators have been gaining bearish momentum, indicating minimal downside resistance for USD/CNH. That said, it would still be prudent to wait for USD/MXN to continue falling below the above-mentioned support levels before making further adjustments. At that point, USD/MXN could become vulnerable further below the psychological 17.0000 mark and test the 16.8885 support zone. The downward trajectory could extend further towards multi-year lows around 16.6945 hit in August.
On the other hand, the overnight swing high near 17.1420-17.1425 appears to be providing resistance, followed by the weekly high around 17.1825 hit on Monday. USD/MXN is likely to encounter strong resistance on any upward move, and may encounter resistance near the 17.2060-17.2280 confluence, which includes the 50% Fibonacci level and the 100-day moving average. However, some follow-through buying should push USD/MXN towards the 38.2% Fibonacci level, around 17.3300, and then towards the 23.6% Fibonacci resistance, around 17.4775.
The next relevant resistance is near the multi-month top, around the 17.7090-17.7095 area, and a clear move above this level for USD/MXN would serve as a new trigger for bullish traders, setting the stage for further USD/MXN appreciation in the near term.
