Forex Market: USD/MXN forecast for Monday

During Friday’s trading session USD/MXN traded within the range of 13.0876-13.1498 and closed at 13.1347, gaining 0.33% for the day and 0.64% for the week.

Fundamental view

Mexico

At 13:00 GMT on Monday Insituto Nacional de Estadistica Y Geografia is expected to report on nations trade balance during March. In February the surplus was 0.976 billion MXN. The trade balance reflects the difference in value between exported and imported goods during the respective period. A positive figure indicates that more goods and services have been exported than imported. Export demand has a direct link to demand for the national currency and also causes an impact on levels of production. In case the surplus on Mexicos trade balance continued to expand, this would provide support to the peso.

United States

The index of pending home sales in the United States probably rose 0.6% during March compared to February, when sales unexpectedly dropped 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 14:00 GMT on Monday. In case pending home sales increased more than anticipated, this would have a bullish effect on the greenback.

Technical view

According to Binary Tribune’s daily analysis, in case USD/MXN manages to breach the first resistance level at 13.1611, it will probably continue up to test 13.1862. In case the second key resistance is broken, the pair will probably attempt to advance to 13.2227.

If USD/MXN manages to breach the first key support at 13.0983, it will probably continue to slide and test 13.0618. With this second key support broken, the movement to the downside will probably continue to 13.0361.