Forex Market: USD/MXN daily trading outlook

Fridays trade saw USD/MXN within the range of 15.3716 – 15.2755. The pair rose less than 0.1% to close at 15.3467, settling the week 0.4% lower after it fell 2% the previous week.

At 06:37 GMT today USD/MXN was down 0.15% for the day to trade at 15.3248, holding in a daily range between 15.3205 and 15.3585.

Fundamental view

United States

The National Association of Realtors (NAR) will release its report on existing home sales for May at 14:00 GMT. The gauge probably gained 4.4% on a monthly basis to the annualized level of 5.26 million units, after unexpectedly falling 3.3% in April to 5.04 million, defying analysts projections for a 1% jump.

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 the 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 the country’s housing market.

The report on existing home sales usually doesnt cause a real direct impact on the 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 the existing home sales report is that it reveals much about the general course of the 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.

Mexico

Mexicos index of retail sales probably rose at an annualized rate of 5.0% in April, according to the median forecast by analysts, down from a better-than-expected 5.5% increase in March. Monthly retail sales probably edged up 0.4%, following a 0.2% increase a month earlier, which was also the third consecutive one.

Retail sales measure the change in the 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 the 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, in general, is bearish for the peso. Mexicos National Institute of Statistics, Geography and Informatics (Instituto Nacional de Estadística y Geografía) will release its report on retail sales at 13:00 GMT.

Pivot points

According to Binary Tribune’s daily analysis, the pair’s central pivot point stands at 15.3313. In case it penetrates the first resistance level at 15.3870, it will encounter next resistance at 15.4274. If breached, upside movement may attempt to advance to 15.4831.

If the cross drops below its S1 level at 15.2909, it will next see support at 15.2352. If the second key support zone is breached, downward movement may extend to 15.1948.

In weekly terms, the central pivot point is at 15.3252. The three key resistance levels are as follows: R1 – 15.4868, R2 – 15.6270, R3 – 15.7886. The three key support levels are: S1 – 15.1850, S2 – 15.0234, S3 – 14.8832.