On an hourly scale, USD/MXN is expected to continue the downside move amid the trend-following characteristic of Darvas Box chart formation. The formation of Darvas Box indicates an inventory adjustment phase between institutional investors and retail participants. Currently, the Darvas Box is forming in a range of 18.10-18.15. Horizontal support is placed from April 03 low at 17.96.

The 20-period Exponential Moving Average (EMA) at 18.15 is acting as a barricade for the US Dollar bulls.

Adding to that, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00 range, indicating more weakness ahead.

Going forward, a decisive break below April 07 low at 18.10 would expose the asset to the horizontal support plotted from April 03 low at 17.96. Further crack below the latter would expose the asset to a fresh five-year low at 17.75.

Alternatively, a break above March 24 high at 18.78 will expose the asset to March 17 high at 18.95 and March 20 high at 19.23.