Forex Market: USD/MXN daily trading forecast

Yesterday’s trade saw USD/MXN within the range of 13.2085-13.2945. The pair closed at 13.2780, gaining 0.47% on a daily basis.

At 8:55 GMT today USD/MXN was down 0.16% for the day to trade at 13.2582. The pair touched a daily low at 13.2503 at 9:10 GMT.

Fundamental view

United States

Manufacturing activity in the United States probably remained almost unchanged in September, with the corresponding preliminary Purchasing Managers’ Index coming in at a reading of 58.0. In August the final seasonally adjusted PMI stood at 57.9, which has been the sharpest improvement in business conditions since April 2010. Export sales registered the fastest rate of increase in three years, while payrolls rose at the steepest pace since March 2013, according to Markit. Values above the key level of 50.0 indicate optimism (expanding activity). Higher than expected PMI readings would certainly support the US dollar. The preliminary data by Markit Economics is due out at 13:45 GMT.

Mexico

Mexicos National Institute of Statistics, Geography and Informatics (Instituto Nacional de Estadística y Geografía) will release its report on retail sales for July at 13:00 GMT. The index of retail sales probably rose 0.2% in July compared to a month ago, following another 0.2% gain in June compared to May. Annualized retail sales probably climbed 2.2% in July. If so, this would be the fastest rate of increase since December 2013. In June sales rose at an annualized pace of 1.1%.

Retail sales measure the change in total value of inflation-adjusted sales at the retail level. It is the primary indicator for consumer spending, which itself accounts for a greater part of nations economic activity. Therefore, higher retail sales suggest accelerating economic activity, which is generally seen as having a bullish effect on the local currency. Lower retail sales, on the other hand, suggest that the economy is cooling, which is, in general, bearish for the Mexican peso.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 13.2603. In case USD/MXN manages to breach the first resistance level at 13.3122, it will probably continue up to test 13.3463. In case the second key resistance is broken, the pair will probably attempt to advance to 13.3982.

If USD/MXN manages to breach the first key support at 13.2262, it will probably continue to slide and test 13.1743. With this second key support broken, the movement to the downside will probably continue to 13.1402.

The mid-Pivot levels for today are as follows: M1 – 13.1573, M2 – 13.2003, M3 – 13.2433, M4 – 13.2863, M5 – 13.3293, M6 – 13.3723.

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.