USD/MXN Price Analysis: Mexican Peso eyes recovery with spinning top on D1 chart

• Tuesday's spinning top candle suggests buyer exhaustion in USD/MXN. 
• Mexican peso could witness a notable oversold bounce in the interim.

USD/MXN created a spinning top candle on Tuesday, which occurs when the pair sees wild swings in both directions before ending the day with moderate gains/losses. 

The spinning top is indicative of buyer exhaustion and validates the extreme overbought conditions signaled by the 14-day relative strength index. 

As a result, the Mexican peso (MXN) could see a notable bounce, pushing USD/MXN lower. At press time, the pair is sidelined around 22.92, having hit a record high of 23.3190 on Wednesday. 

A close below 22.4586 (Tuesday's low) would confirm a bearish reversal spinning top pattern and open the doors for a slide to the March 16 low of 21.3927. Alternatively, a close above Tuesday's high of 23.2319 would imply bullish continuation. 

Daily chart

Trend: Pullback likely

Technical levels