The 18.5000 level is more important than you think.
The USD/MXN18.5000 level has capped the rally in recent weeks. And you can see the strong descending trend line capping the market. Even the rally this week has tried to keep a "lower high" but we think this is just a byproduct of the descending trend line. A break of the 18.5000 level would target 18.8700, but 20.2100 would be more likely. While above the 200dma we expect a break of resistance.
You should keep a close eye on the RSI (lower panel) on a breakout. If the price moves higher, the RSI could be a good gauge to see if the trend will continue with a confirming move higher, or potential divergence which could signal we hit a near-term top between 18.8700 to 20.2100.
