During yesterday’s trading session USD/MXN traded within the range of 12.8997-12.9392 and closed at 12.9233.
At 11:19 GMT today USD/MXN was adding 0.09% for the day to trade at 12.9375. The pair touched a daily high at 12.9389 at 11:18 GMT.
Fundamental view
The initial jobless claims in the US probably fell to 310 000 in the week ended May 17, from 297 000 a week ago, according to the median estimate by experts. The indicator measures the number of applications for unemployment benefits that are recorded each week in a report prepared by the Bureau of Labor Statistics in the United States. The data is due out at 12:30 GMT. In case initial jobless claims rose less than expected, this will boost demand for the US dollar.
In addition, at 14:00 GMT the National Association of Realtors (NAR) will report on existing home sales in the United States during April. In March compared to February, existing home sales rose 2.2% to an annualized level of 4.68 million. The sample of data encompasses condos, co-ops and single-family houses.
Statistical data on existing home sales is often used along with statistical figures regarding the New home sales and Pending home sales, with the major objective being to draw a conclusion how nation’s housing sector is performing, regardless of interest rates. The most active house-purchasing period in the United States is usually between the months of March through June. Therefore, in case statistical data revealed a sudden drop in the number of homes sold rather than an improvement during this period, this would be considered as a signal of weakness in country’s housing market.
The report on existing home sales usually does not cause a real direct impact on US economy. Actually, this effect appears to be minimal, due to the fact that nothing is produced with the mere sale of an existing home. In terms of economic activity, the sale of an existing house may be related only to interior design and purchases of new furniture.
In case the index increased more than anticipated, this would support the greenback.
Also at 14:00 GMT the Institute for Supply Management (ISM) is to report on manufacturing activity in the country. According to experts’ estimates, the gauge of manufacturing probably increased to 55.5 in May from 55.4 in the previous month. Values above 50.0 signify increased activity. In case market expectations are exceeded, the US dollar will receive support.
Technical view
According to Binary Tribune’s daily analysis, in case USD/MXN manages to breach the first resistance level at 12.9422, it will probably continue up to test 12.9602. In case the second key resistance is broken, the pair will probably attempt to advance to 12.9813.
If USD/MXN manages to breach the first key support at 12.9021, it will probably continue to slide and test 12.8812. With this second key support broken, the movement to the downside will probably continue to 12.8628.
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