Forex Market: USD/MXN daily forecast

During yesterday’s trading session USD/MXN traded within the range of 12.9376-13.0061 and closed at 13.0040, gaining 0.44% for the day.

At 7:52 GMT today USD/MXN was gaining 0.04% for the day to trade at 13.0089. The pair touched a daily high at 13.0133 at 7:25 GMT.

Fundamental view

United States

Consumer confidence in the United States probably improved in July, with the corresponding index coming in at a reading of 85.3, according to market expectations, from 85.2 in June.

This is a composite index, based on the results of a survey, which encompasses almost 5 000 households in the United States. Participants are asked about their opinion in regard to current and future macroeconomic conditions in the country, business conditions and the availability of work opportunities. Fundamental traders examine the confidence index readings in an attempt to determine the probability of an increased consumer spending. This is the reason why it is considered as a leading fundamental indicator.

The survey on consumer confidence belongs to the group of economic indicators, which measure financial confidence among consumers. The more confidence in economic conditions consumers have, the more inclined they will be to spend money, which in turn stimulates the economy.

The report on consumer confidence provides clues as to how the public would estimate their ability to obtain employment and how their income would be spent. In case the indicator tends to decrease, this may suggest that consumers would abstain from making huge, large-ticket purchases, which on the other hand, could deliver a hit on manufacturers of luxury or expensive goods, such as automobiles for instance.

Better than projected survey results usually indicate that optimism among consumers has strengthened, while this may lead to higher spending in the country. These better results tend to provide support to the US dollar.

The Conference Board research group is scheduled to publish the official data at 14:00 GMT.

Home values in 20 large cities throughout the United States probably rose at an annualized rate of 9.9% in May, preliminary analysts’ estimates showed. In April, home prices climbed at a rate of 10.82%, which has been the weakest since February 2013. S&P/Case-Shiller will announce the official change in prices at 13:00 GMT. Higher than expected rate of increase would boost demand for the greenback.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 12.9826. In case USD/MXN manages to breach the first resistance level at 13.0275, it will probably continue up to test 13.0511. In case the second key resistance is broken, the pair will probably attempt to advance to 13.0960.

If USD/MXN manages to breach the first key support at 12.9590, it will probably continue to slide and test 12.9141. With this second key support broken, the movement to the downside will probably continue to 12.8905.

The mid-Pivot levels for today are as follows: M1 – 12.9023, M2 – 12.9366, M3 – 12.9708, M4 – 13.0051, M5 – 13.0393, M6 – 13.0736.

In weekly terms, the central pivot point is at 12.9550. The three key resistance levels are as follows: R1 – 12.9925, R2 – 13.0211, R3 – 13.0586. The three key support levels are: S1 – 12.9264, S2 – 12.8889, S3 – 12.8603.