Forex Market: USD/MXN daily trading forecast

Yesterday’s trade saw USD/MXN within the range of 13.5730-13.6526. The pair closed at 13.6509, gaining 0.23% on a daily basis.

At 7:55 GMT today USD/MXN was down 0.06% for the day to trade at 13.6450. The pair touched a daily low at 13.6366 at 7:46 GMT.

Fundamentals

Mexico

Gross Domestic Product

Mexicos annualized Gross Domestic Product probably expanded 2.2% during the third quarter of the year compared to the second quarter. In Q2 economy grew at an annualized rate of 1.6%, down from a revised 1.9% increase during the first three months of the year. The agriculture sector expanded 2.6% year-on-year in Q2, slowing from a 4.6% growth during the previous quarter. Industrial output grew at an annualized rate of 1%, down from a 1.6% growth during the preceding quarter, while the mining industry kept its downtrend and contracted 1% in Q2.

Mexican GDP probably expanded 0.6% in Q3 compared to Q2, according to market expectations, following a 1.0% growth in the second quarter. The latter has been the fastest quarterly growth rate since Q3 2013, when economy expanded 1% as well.

The GDP represents the total monetary value of all goods and services produced by one nation over a specific period of time. Higher rates of growth suggest that interest rates may follow the same direction. Higher interest rates, on the other hand, will usually attract more investors, willing to purchase assets in the country, while, at the same time, this will increase demand for the local currency. Therefore, in case economic growth in Mexico surpassed the median forecast, this would provide support to the peso. Instituto Nacional de Estadística y Geografía is expected to publish the GDP report at 14:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 13.6255. In case USD/MXN manages to breach the first resistance level at 13.6780, it will probably continue up to test 13.7051. In case the second key resistance is broken, the pair will probably attempt to advance to 13.7576.

If USD/MXN manages to breach the first key support at 13.5984, it will probably continue to slide and test 13.5459. With this second key support broken, the movement to the downside will probably continue to 13.5188.

The mid-Pivot levels for today are as follows: M1 – 13.5324, M2 – 13.5722, M3 – 13.6120, M4 – 13.6518, M5 – 13.6916, M6 – 13.7314.

In weekly terms, the central pivot point is at 13.5552. The three key resistance levels are as follows: R1 – 13.6185, R2 – 13.7029, R3 – 13.7662. The three key support levels are: S1 – 13.4708, S2 – 13.4075, S3 – 13.3231.