USD/MXN breaches significant support

The US Dollar has appreciated substantially against the Mexican Peso during the past three weeks. The pair managed to reach a five-month high at 18.83 on Tuesday evening. Subsequently, the Greenback edged lower and breached the diminishing trading range apparent since early October.

The given currency managed to move below a strong support cluster formed by the monthly R2, weekly R1 and the 55-hour SMA. These factors suggest a possible downside momentum that could push the rate towards the lower channel boundary circa 18.60/65.

A breakout of this line should be followed by a fall down to the weekly PP and the 200-hour SMA near 18.45.