Forex Market: USD/MXN daily trading forecast

Friday’s trade saw USD/MXN within the range of 13.1827-13.2602. The pair closed at 13.2110, losing 0.19% on a daily basis.

At 6:34 GMT today USD/MXN was up 0.19% for the day to trade at 13.2358. The pair touched a daily high at 13.2371 at 6:20 GMT.

Fundamental view

United States

Sales of existing homes

The index of existing home sales in the United States probably gained 0.3% to a level of 5.20 million in August compared to July. In July compared to June existing home sales rose 2.4% to 5.15 million, or the highest level since September 2013. 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.

The reason markets pay a certain attention to existing home sales report is that it reveals much about the general course of nation’s economy. A major part of the population considers a house as a sign of wealth and, unlike the money wealth, which is concentrated in certain regions of the country and held by the wealthiest representatives of the population, ”housing wealth” is evenly distributed across the country.

In case the index increased more than anticipated, this would have a bullish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 14:00 GMT.

Mexico

The rate of unemployment in Mexico probably dropped to 4.8% during August, according to the median forecast by experts. In July the rate was reported at 5.47%. It represents the percentage of the eligible work force that is unemployed, but is actively seeking employment. The rate of unemployment also reflects overall economic state in the country, as there is a strong correlation between consumer spending levels and labor market conditions. Low rates of unemployment are accompanied by stronger spending, which causes a favorable effect on corporate profits and also leads to overall growth acceleration. Therefore, in case the rate of unemployment fell more than expected, this would have a positive effect on the local currency. Instituto Nacional de Estadística y Geografía is to announce the official rate at 13:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 13.2180. In case USD/MXN manages to breach the first resistance level at 13.2533, it will probably continue up to test 13.2955. In case the second key resistance is broken, the pair will probably attempt to advance to 13.3307.

If USD/MXN manages to breach the first key support at 13.1756, it will probably continue to slide and test 13.1405. With this second key support broken, the movement to the downside will probably continue to 13.0982.

The mid-Pivot levels for today are as follows: M1 – 13.1194, M2 – 13.1581, M3 – 13.1969, M4 – 13.2356, M5 – 13.2744, M6 – 13.3131.

In weekly terms, the central pivot point is at 13.2041. The three key resistance levels are as follows: R1 – 13.2858, R2 – 13.3607, R3 – 13.4424. The three key support levels are: S1 – 13.1292, S2 – 13.0475, S3 – 12.9726.