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Forex Market: USD/MXN daily trading forecast

Yesterday’s trade saw USD/MXN within the range of 14.6830-14.9157. The pair closed at 14.7130, losing 1.21% on a daily basis.

At 8:30 GMT today USD/MXN was down 0.18% for the day to trade at 14.6896. The pair broke the first key weekly support level and touched a daily low at 14.6864 at 8:15 GMT.


United States

Initial, Continuing Jobless Claims

The number of people in the United States, who filed for unemployment assistance for the first time during the week ended on January 2nd, probably decreased to 290 000 from 298 000 in the prior week. The latter has been the highest number of claims since the week ended on November 21st,. The 4-week moving average, an indicator lacking seasonal effects, was 290 750, marking an increase of 250 from the previous weeks revised average. The prior weeks average was revised up by 250 from 290 250 to 290 500.

Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims fell more than projected, this would have a bullish effect on the greenback.

The number of continuing jobless claims probably increased to the seasonally adjusted 2 370 000 during the week ended on December 26th, from 2 353 000 in the previous week. The latter was a decrease by 53 000 compared to the revised up number of claims, reported during the week ended on December 12th. This indicator represents the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.

The Department of Labor is to release the weekly report at 13:30 GMT.


Consumer Price Index (CPI)

The annualized consumer inflation in Mexico probably edged down to 4.11% in December, according to the median forecast by experts, from 4.17% in November. If so, this would be the second consecutive month of slowdown, but still the annual rate would be above the 4% tolerance ceiling set by the central bank. In November cost of restaurants and hotels marked the largest annual increase, or 6.51%, followed by prices of alcoholic beverages and tobacco (up 6.29%) and food prices (up 5.94%). Transport costs were 5.62% higher, while cost of education rose 4.3%. The largest downward pressure came from communication costs, which fell at an annualized rate of 5.48% in November.

Key categories, included in Mexican CPI, are Non-food Goods (accounting for 19.7% of the total weight), Housing (18.7%) and Other Services (18.4%). Other categories include Food, Beverages and Tobacco (14.8%), Energy (9.5%), Products subsidized by the government (5.3%), Education (5.1%), Meat and Eggs (4.8%) and Fruits and Vegetables (3.7%).

In case the CPI slowed down more than projected and, thus, approached the target inflation level, this might have a bullish effect on the local peso. Instituto Nacional de Estadistica Y Geografia is expected to release the official report at 14:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 14.7706. In case USD/MXN manages to breach the first resistance level at 14.8581, it will probably continue up to test 15.0033. In case the second key resistance is broken, the pair will probably attempt to advance to 15.0908.

If USD/MXN manages to breach the first key support at 14.6254, it will probably continue to slide and test 14.5379. With this second key support broken, the movement to the downside will probably continue to 14.3927.

The mid-Pivot levels for today are as follows: M1 – 14.4653, M2 – 14.5817, M3 – 14.6980, M4 – 14.8144, M5 – 14.9307, M6 – 15.0471.

In weekly terms, the central pivot point is at 14.7946. The three key resistance levels are as follows: R1 – 14.9112, R2 – 14.9889, R3 – 15.1055. The three key support levels are: S1 – 14.7169, S2 – 14.6003, S3 – 14.5226.

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