USD/MXN Monthly Forecast: March 2025

• The USD/MXN pair has done very little over the last couple months, although we did have a quick start at the beginning of the month of February as Donald Trump suggested that we were in fact going to the tariffs placed on Mexico, but then he walked it back for a month.
• This has the US dollar falling against the Mexican peso, but we have since seen it try to rally a bit. All things being equal, this is a market that I think is going to continue to pay close attention to this range that we have been in.
• Underneath, we have the 20 MXN level, which of course attracts a lot of attention overall, and I think is an area that previously had offered enough resistance there should be a significant amount of “market memory” in this area.
• Because of this, I would assume that there is going to be a certain amount of buyers waiting to get involved in that region. If we were to break down below the 20 MXN level, then the market probably goes dropping to the 19.50 MXN level, where the 50 Week EMA currently resides.

On the other hand, to the upside we have the crucial 21 MXN level, that a lot of people will be watching. The 21 and MXN choose to level being broken to the upside would signal that the US dollar is about to swallow the Mexican peso again, and that could send this market much higher. In that environment, we probably see the US dollar looking to the 23 MXN level before it is all said and done.

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As things stand right now, I’m more of a “buy on the dips” trader in this pair, mainly because I do not want to short the US dollar and of course we have to keep an eye on the Mexican economy as it is crumbling a bit. Furthermore, the Federal Reserve is light years away from cutting interest rates, so I think you also have to keep that in the back of your head as well. However, it’s a fluid situation, so we need to think that the market is just simply trying to find momentum, something that it does not have at the moment.

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