• USD/MXN reverses the previous day’s gains ahead of the Fed policy decision.
• MACD shows a pattern of divergence below the signal line; indicating a momentum shift.
• The immediate support appears around the weekly low, followed by the 17.0000 psychological level.

USD/MXN retraces the previous day’s gains, trading lower around 17.1040 during the European session on Tuesday. Investors caution ahead of the US Federal Reserve’s (Fed) policy decision contributes the support for undermining the pair.

The immediate support for the USD/MXN pair appears around the weekly low at 17.0308, followed by the 17.0000 psychological level.

If bearish sentiment exerts pressure, the pair could potentially approach the next support level near the 16.9000 psychological level.

The USD/MXN pair could face a challenge around the seven-day Exponential Moving Average (EMA) at 17.1625, following the 23.6% Fibonacci retracement at 17.1904 level.

A firm break above the latter could open the doors for the pair to explore the region around the 17.2000 psychological level.

The Moving Average Convergence Divergence (MACD) line remains above the centerline, but it exhibits a pattern of divergence beneath the signal line. This pattern indicates that the recent uptrend in the USD/MXN pair is losing strength.

However, the 14-day Relative Strength Index (RSI) indicates bearish momentum in the short term as it lies below the 50 level