Dollar Recovers Against Mexican Peso as Technicals Hint at Short-Term Shift

The US dollar rebounded against the Mexican peso over the last 24 hours, breaking a multi-day losing streak and signaling a possible shift in short-term sentiment.

According to official FXCM and TradingView data, USD/MXN climbed from 18.88 to 19.05 during the Thursday session and into early Friday, marking a clear reversal after touching its lowest level of the year just a day before.

This move comes after the peso’s strong run, which saw the currency hit 18.83 per dollar on June 11, its strongest since August 2024. The reversal began late Thursday, with the dollar regaining ground.

It closed above the psychologically important 19.00 mark for the first time in several sessions. Price action in the last 24 hours shows a low of 18.86 and a high of 19.07, confirming increased volatility and a decisive change in direction.

Technical indicators on the daily chart support this view. The Relative Strength Index (RSI) has bounced from near-oversold levels, moving from 38 to 41, suggesting the recent selling pressure has eased.

The Moving Average Convergence Divergence (MACD) histogram, while still negative, shows a clear reduction in bearish momentum, with the signal and MACD lines converging.

Bollinger Bands, which had been expanding as the peso strengthened, now show price rebounding from the lower band, indicating a potential mean reversion.

The four-hour chart provides further confirmation. The RSI surged above 55, moving out of oversold territory and signaling renewed buying interest in the dollar.

The MACD on this timeframe crossed above its signal line, which often precedes short-term trend changes. Volume also picked up during the reversal, adding weight to the move.

Fundamental factors remain mixed. Mexico’s central bank continues to hold its benchmark rate at 8.50%, supporting the peso, while inflation in both the US and Mexico remains moderate.

However, the dollar’s recent weakness had priced in further Federal Reserve easing, and traders now appear to be reassessing those expectations.

No large ETF inflows or outflows were reported, suggesting the move was driven by spot market activity rather than institutional repositioning.

In summary, the dollar’s recovery from 18.88 to 19.05 against the peso marks a pause in the peso’s rally and introduces uncertainty into the near-term outlook.

Technical signals point to a possible short-term correction higher for USD/MXN, but the broader trend remains bearish unless the pair can close convincingly above the 19.15–19.20 resistance zone. Market participants now watch for follow-through and confirmation of this shift as the week closes.

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