USD/MXN drops below 18.80, remains within a familiar range

• Mexican peso flat versus the US dollar on Tuesday.
• Greenback post mixed results across the board, as US yields and Wall Street rises. 

The USD/MXN printed a fresh daily low during the American session at 18.77 as it holds within a small range, near multi-month lows. The pair is about to end the day practically unchanged versus the US dollar. 

The greenback posted mixed results in Tuesday, gaining versus the euro and the yen but falling against other majors like the pound and the Swiss franc. Market participants mostly ignored US CPI data.  On Wednesday, the US Producer Price Index is due and the Empire Manufacturing Index. 

The positive tone around financial markets continues to support the Mexican peso, but the strength is not enough to push for a break of the 18.74 area. 

Technical outlook 

For the fourth day in a row, USD/MXN trades in a range between 18.87 and 18.74. Is it consolidating near the 2019 and 2020 lows, holding a bearish tone. If it manages to keep levels under 18.80, the bearish pressure will likely intensify. The next target is seen at 18.65. 

On the upside, if the pair rises and keeps levels near 18.85, the bullish momentum will likely rise, exposing the critical 19.00 area. Since late December, 19.00 has been offering resistance that, if broken, could signal that a bottom is in place.