USDMXN Forecast Mexican Peso Reaches Levels Not Seen Since 2024

One of the most notable developments in recent weeks has been the sustained strength of the Mexican peso against the U.S. dollar. During today's session alone, USD/MXN is down approximately 0.5%, reinforcing the bearish bias that currently dominates the currency pair.

Selling pressure remains in place ahead of the release of the Federal Reserve's meeting minutes, at a time when the U.S. dollar has continued to show signs of weakness. Adding to this dynamic, improving sentiment toward the North American trade outlook has helped support the Mexican peso. As long as these catalysts remain in place, downside pressure on USD/MXN could continue to be a key theme in the coming sessions.

What's happening to the U.S. dollar?

One of the most important short-term drivers is the continued weakness of the U.S. dollar. Markets have begun scaling back expectations for additional rate hikes from the Federal Reserve as investors await the release of today's Fed minutes.

This shift in expectations is also evident in the U.S. Treasury market. The yield on the 10-year Treasury note has declined toward the 4.65% area, moving further away from the highs reached earlier in 2026. Lower yields tend to reduce the relative attractiveness of U.S. fixed-income assets for international investors, which can also weigh on demand for the U.S. dollar.

Source: TradingEconomics

The lower likelihood of additional rate increases, combined with the recent decline in Treasury yields, has already begun to affect the dollar's performance against its major counterparts. This can be seen in the DXY Index, which measures the strength of the greenback and has slipped back below the 100-point mark, reflecting a loss of bullish momentum in the near term.

Source: TradingEconomics

Against this backdrop, the release of the Fed minutes is particularly important given that Kevin Warsh has provided limited guidance regarding the future path of monetary policy. Investors will be looking for clues as to whether the Fed intends to maintain a neutral stance or if policymakers remain open to supporting higher interest rates over the coming months.

If the central bank continues to endorse a relatively stable policy outlook, the weakness currently affecting the U.S. dollar could persist and continue supporting the Mexican peso, keeping downside pressure on USD/MXN in place. On the other hand, if the minutes reveal a more hawkish tone than expected, the dollar could find some relief after several weeks of sustained weakness.

 

How is the tariff situation evolving?

It was recently reported that the U.S. government decided to delay the implementation of proposed tariffs of approximately 50% on Canadian goods that had been scheduled to take effect today. The decision has helped ease concerns about a broader escalation of trade tensions across North America.

The development could also be supportive for Mexico, as it reduces fears that similar measures could eventually be applied to Mexican exports. Both Canada and Mexico operate under the USMCA/T-MEC framework, and the easing of tensions with Canada may be interpreted as a sign that the United States remains willing to negotiate rather than immediately impose more aggressive trade restrictions.

As a result, the trade-risk premium associated with the region appears to have declined in the short term. This has helped stabilize sentiment toward the Mexican peso, which could continue receiving support if negotiations among North American countries continue to progress. Should this trend persist, the environment may remain favorable for additional downside pressure on USD/MXN in the weeks ahead.

 

USD/MXN Technical Forecast

Source: StoneX, Tradingview

• Long-term trendline regains control: The bearish price action seen in recent weeks has reinforced the importance of the long-term descending trendline that has guided the pair lower for several months. The formation of fresh lows has restored the relevance of this technical structure, and there are currently few signs that the market is close to challenging it. As long as the trendline remains intact, it is likely to continue serving as the dominant pattern in the weeks ahead.
   

• RSI: The Relative Strength Index remains below the neutral 50 level, indicating that bearish momentum continues to dominate. However, the indicator is also approaching the oversold territory marked by the 30 level, which could signal that selling pressure is becoming stretched and may open the door to short-term corrective rebounds.
   

• MACD: The MACD histogram remains below the zero line, suggesting that the average strength of the moving averages continues to favor the bearish side. This signal supports the view that downside momentum remains the dominant force and could continue influencing price action over the coming weeks.

Key Levels to Watch:

• 17.35 – Major Resistance: A recent high that coincides with the 50-period simple moving average. A sustained move above this level could threaten the dominant downtrend and reopen the possibility of a broader sideways trading range similar to the one seen months ago.
   

• 17.10 – Immediate Barrier: A nearby reference level that previously acted as a significant low in 2026. It may now serve as an intermediate resistance area should short-term corrective rallies develop.
   

• 16.83 – Key Support: A major low not seen since 2024 and one of the most important downside levels on the chart. A move toward this area would reinforce bearish control and could extend the dominant downtrend over the coming weeks.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25