The pair has been left pretty much at the mercy of the Dollar in recent weeks and that is why it is seeing a strong reversal in price as the USD comes off from recent highs. This dynamic in USD/MXN has been going on for a while and can be pretty evident if you overlap it with the Dollar index chart (DXY).

Mexico's economic data is sparse so I expect that the US Dollar will continue to drive the pair. Although the Fed's Wednesday meeting was sufficient to convince traders that some risk-off moves were being reversed, bearish sentiment has already begun at the start of the week. USD/MXN pulled back over 2%, its largest move in the past month.

Now, the question is whether this is a temporary adjustment or if there's more to this move. A follow-through could lead to sellers moving towards the lower limit of the range (19.68), although this will not be easy considering the difficulties the pair have encountered in this area over three months. The next area to watch is 19.50. This area has not been touched by the pair since March 2020, despite numerous attempts. Breaking below could lead to consolidation towards 2020 lows of 18.50.

If the US Dollar regains bullish momentum, USD/MXN will trade above 20 Pesos per USD. With 20.08 being a strong resistance, USD/MXN could move towards the 76.4% Fibonacci at 21.18.