Ella 
USD/MXN traded within a tight range near the one-week low hit on Wednesday.
The technical picture is unclear and bears should proceed with caution to avoid further losses in USD/MXN.
If USD/MXN continues to strengthen beyond the 38.2% Fibonacci level, it will lay the foundation for a significant rise.
USD/MXN fell back during the Asian session on Wednesday, consolidating recent losses and falling back to a one-week low hit the previous day. USD/MXN is currently trading around 17.80, down 0.10% on the day, and is close to resistance formed by the confluence of the 200-day simple moving average (SMA) and the multi-month downtrend line.
Meanwhile, daily technical indicators retreated from their highs but managed to remain within positive territory. Therefore, it would be prudent to wait for the above-mentioned USD/MXN to clearly break below the resistance-reversal support level before launching a pullback on the recent USD/MXN move from mid-18.00, the highest level since late March hit last week. Cancel an established position. The 17.65 area is the 23.6% Fibonacci retracement level of the July decline, and some follow-through selling below this area will make USD/MXN favorable for bears in the short term.
USD/MXN is likely to accelerate its decline towards horizontal support at 17.40-17.35 before falling further towards intermediate support at 17.15-17.10. USD/MXN is likely to continue its downward path and push prices towards the 16.90-16.85 area, followed by multi-year lows around the 16.65-16.60 area hit in July.
On the other hand, the 18.00 round figure now appears to constitute adjacent resistance, followed by the 18.15-18.20 area. This is followed by the 38.2% Fibonacci level at the 18.30 area, and then near the key mid-month line of 18.00. If the strength continues, it will create conditions for USD/MXN to resume its upward trend of more than a month and push USD/MXN to the 18.80-18.85 area (50% Fibonacci level).
