USD/MXN Price Analysis: Is the rally over for the Mexican peso?

• Mexican peso and emerging market currencies under pressure amid risk aversion
• USD/MXN makes potential double bottom near 20.85, upside risk on the rise.

The USD/MXN is rising for the third consecutive day on Wednesday after making an acceleration, triggered by a rally of the US dollar against emerging market currencies amid risk aversion.

On Wednesday, USD/MXN peaked at 21.36 and pulled back. It is testing the 20-day moving average that stands around 21.30. A consolidation above would strengthen the rally of the dollar.

A slide back under 21.20 could suggest that the Mexican peso could test again the key support at 20.80/85 that if broken would clear the way to more losses, with not much support until 20.30.

On a wider perspective, there is a potential double bottom at 20.83. If the upside momentum remains a possible target is seen at 21.90. Above the critical level is 22.50 that should limit the upside, but if broken would leave the Mexican peso vulnerable to significant losses.

USD/MXN daily chart