Mexican Peso: Downside Momentum Returns After Breaking Below 200-Day Moving Average — Société Générale

USD/MXN has shifted direction after breaking through a key technical level. Société Générale analyst Kenneth Broux noted that the pair has broken above a multi-month descending trendline and, for the first time since April 2025, reclaimed its 200-day moving average, signaling the return of the downside momentum that previously dominated the market. As of press time, USD/MXN was trading near 17.56737, above the key moving average.

**Technical Pattern Confirms Trend Reversal**

According to Société Générale's analysis, USD/MXN had held a key low near 17.10 and successfully broke out from a small base pattern. Initial resistance lies at the 17.80 level near the 200-day moving average. Market reports indicate that after breaking above the 200-day moving average, the technical landscape has shifted from a previously bullish peso stance to a bearish peso one, with downside pressure re-accumulating.

**Fundamental Factors Amplify Volatility**

The Bank of Mexico's policy moves have become a key variable influencing the peso's trajectory. Reports indicate that the central bank's pause in rate hikes is weighing on the peso, resonating with the technical breakout. Société Générale strategists believe that against the backdrop of a policy shift, the peso's previously accumulated gains face pullback risks, and upside momentum in USD/MXN is strengthening.

**Market Watches Resistance Breakout Ahead**

Market participants are closely monitoring whether the 200-day moving average resistance near 17.80 can be effectively broken. If the pair holds above this level, it could open the door to further upside; conversely, a fall back below the average could invalidate the current breakout signal. Société Générale's analysis suggests that the sustainability of this breakout will be key to determining the peso's medium-term trajectory.