Ella 
In the Asian market on Tuesday, USD/MXN struggled to gain significant momentum and fluctuated within a narrow range around 18.20.
From a technical perspective, USD/MXN is struggling to find support above the 38.2% Fibonacci retracement level of July’s decline. Coupled with the fact that the daily relative strength indicator remains in overbought territory, bullish traders need to be cautious. Nonetheless, USD/MXN’s latest breakout above the 17.80-17.85 confluence (converging the key 200-day simple moving average and the multi-month descending trendline) suggests that USD/MXN offers minimal upside resistance.
Meanwhile, any consolidating decline in USD/MXN is more likely to attract fresh buying around 18.0000 and find support near the aforementioned resistance breakout, which has now turned into support. The next key support is near the 23.6% Fibonacci level at 17.6635, and a clear break below this level for USD/MXN would negate the bullish outlook and favor a bearish bias in the short-term. The USD/Mexico pair is likely to accelerate its decline towards the 17.40-17.35 horizontal support, then towards the 17.15-17.10 area, and finally to sub-17.00 levels.
On the upside, bulls will need to wait for USD/MXN to continue to strengthen after breaking through the 38.2% Fibonacci level before placing bets. Some follow-through buying in USD/MXN above last Friday’s swing high (around the mid-18.00 level) would reaffirm the bullish bias and push prices further towards the 18.80-18.85 area (50% Fibonacci level) . Some follow-through buying would open the door for USD/MXN to continue the uptrend it has been on for over a month.
