USD\/MXN has dropped after not holding above the 50-day moving average, testing the support zone near 17.85\u201317.80. Soci\u00e9t\u00e9 G\u00e9n\u00e9rale analysts suggest a fall below these levels could lead to the July 2024 lows of around 17.60.<\/p>\n
The pair extended its decline when failing to surpass the 50-DMA near 18.22, testing projections at 17.85\/17.80. Although there’s positive divergence on the daily MACD, no clear reversal signals have appeared in the price action.<\/p>\n
A short-term bounce may face resistance at the 18.22 moving average. If this level is not overcome, the decline could continue, targeting the July 2024 lows near 17.60.<\/p>\n
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The US dollar is weakening against the Mexican peso after failing to stay above the 50-day moving average, now near 18.22. We are currently watching the pair test a support area around 17.85 and 17.80. While some indicators suggest the fall might slow, a decisive break lower would put the July 2024 lows of 17.60 back in play.<\/p>\n
For traders anticipating further peso strength, this suggests positioning for a move toward the 17.60 level in the coming weeks. Buying put options with a strike near 17.75 could be a way to capitalize on a break of the current support. This strategy offers a defined-risk approach to a continued downward trend.<\/p>\n
This peso strength is supported by fundamental factors we observed throughout 2025. The Bank of Mexico has maintained a high interest rate, which stood at 11.00% in the final quarter, compared to the U.S. Federal Reserve’s 5.50%, making the peso very attractive for carry trades. This significant yield difference continues to draw capital into Mexico.<\/p>\n
Furthermore, economic data from late 2025 reinforces this view. Remittances from the US hit another record high in November 2025, providing a consistent flow of dollars into the Mexican economy. This, combined with ongoing foreign direct investment from nearshoring trends, creates a steady demand for the peso.<\/p>\n
However, if a short-term bounce for the dollar does happen, we should view the 18.22 moving average as a strong resistance level. Selling call spreads with a ceiling around this area could be an effective strategy to profit if the dollar\u2019s recovery attempt fails. This allows traders to benefit from the broader downtrend while collecting premium.<\/p>\n
While the trend points downward, we should remain cautious due to the positive divergence on the MACD indicator, which hints that the selling pressure might be weakening. Looking back, we saw sharp volatility around the 2024 elections, reminding us that conditions can change quickly. Therefore, using strategies with defined risk is prudent.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/MXN declines below 50-DMA, testing key support; risk of drop to July 2024 lows near 17.60.<\/p>\n","protected":false},"author":62,"featured_media":16959,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38585","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38585","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=38585"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38585\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16959"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38585"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38585"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}