Yesterday’s trade saw USD/MXN within the range of 14.6170-14.6588. The pair closed at 14.6497, up 0.21% for the day and marking a second consecutive daily gain.
At 8:58 GMT today USD/MXN was down 0.04% for the day to trade at 14.7478. The pair touched a daily low at 14.7218 during Asian trade.
Fundamentals
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 23rd, probably decreased to 300 000 from 307 000 in the prior week. The 4-week moving average, an indicator lacking seasonal effects, was 306 500, marking an increase of 6 500 from the previous weeks revised up average of 300 000.
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 fell to the seasonally adjusted 2 420 000 during the week ended on January 16th, from 2 443 000 in the previous week. The latter was an increase by 15 000 compared to the revised up number of claims, reported during the week ended on January 2nd. 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.
Pending home sales
The index of pending home sales in the United States probably rose 0.5% during December compared to November, when sales were up 0.8%.
When a sales contract is accepted for a property, it is recorded as a pending home sale. As an indicator the index provides information on the number of future home sales, which are in the pipeline. It gathers data from real estate agents and brokers at the point of a sale of contract and is currently the most accurate indicator regarding US housing sector. It samples over 20% of the market. In addition, over 80% of pending house sales are converted to actual home sales within 2 or 3 months. Therefore, this index has a predictive value about actual home sales.
Although there are some cancellations, there are not enough for the data to be skewed one way or another. The base value of the index is equal to 100, while the base year is 2001, when there has been a high level of home sales.
The National Association of Realtor’s (NAR) will release the official index value at 15:00 GMT. In case pending home sales increased more than anticipated, this would have a certain bullish effect on the greenback.
Mexico
Interest rate decision
Bank of Mexico (Banco de México) will probably leave its benchmark interest rate (overnight interbank rate) without change at 3.0% at the policy meeting today. The central bank reduced the overnight rate by 0.50% to the current record low level of 3.0% at its meeting on June 6th 2014, in order to bolster economy, that has not managed to recover in 2014. The bank kept its current stance on policy at the December 12th meeting, in spite of a weak economic growth outlook. Mexican economy expanded at a rate of 0.5% quarter-on-quarter in the July-September period, as activity in services and production industries slowed, while annual inflation rate still remained above the central banks 4% tolerance ceiling for a sixth consecutive month in December.
Short-term interest rates are of utmost importance for the valuation of national currencies. In case Bank of Mexico is dovish about economic activity in the country and, thus, decides to maintain or even further reduce the benchmark interest rate, this will have a bearish effect on the peso.
The official policy decision is scheduled to be announced at 17:00 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 14.6418. In case USD/MXN manages to breach the first resistance level at 14.6667, it will probably continue up to test 14.6836. In case the second key resistance is broken, the pair will probably attempt to advance to 14.7085.
If USD/MXN manages to breach the first key support at 14.6249, it will probably continue to slide and test 14.6000. With this second key support broken, the movement to the downside will probably continue to 14.5831.
The mid-Pivot levels for today are as follows: M1 – 14.5916, M2 – 14.6125, M3 – 14.6334, M4 – 14.6543, M5 – 14.6752, M6 – 14.6961.
In weekly terms, the central pivot point is at 14.6747. The three key resistance levels are as follows: R1 – 14.7748, R2 – 14.8965, R3 – 14.9966. The three key support levels are: S1 – 14.5530, S2 – 14.4529, S3 – 14.3312.
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