Forex Market: USD/MXN daily forecast

During yesterday’s trading session USD/MXN traded within the range of 12.8537-12.8879 and closed at 12.8771.

At 11:11 GMT today USD/MXN was losing 0.01% for the day to trade at 12.8692. The pair touched a daily low at 12.8548 at 10:35 GMT, breaching the first key support.

Fundamental view

The initial jobless claims in the US probably fell to 317 000 in the week ended May 24, from 326 000 a week ago, according to the median estimate by experts. The indicator measures the number of applications for unemployment benefits that are recorded each week in a report prepared by the Bureau of Labor Statistics in the United States. The data is due out at 12:30 GMT. In case initial jobless claims fell more than expected, this will boost demand for the US dollar.

In addition, United States’ preliminary (revised) annualized Gross Domestic Product probably shrank 0.5% during the first quarter of 2014, following an advance 0.1% gain, announced on April 30.

This is the widest indicator for nation’s economic activity. A larger than expected increase in theGDP figure would boost demand for the US dollar. The official result is to be released at 12:30 GMT.

Moreover, the index of pending home sales in the United States probably rose by 1% in April compared to March, when sales unexpectedly jumped 3.4%. This indicator shows activity in terms of signing contracts for purchases of existing single-family houses. Actual payments are made one to two months after the contract has been signed. The index was started in 2001 and its base value was set at 100 points. The index of pending sales is built on broad national sample covering about 20% of the transactions of existing home sales.

The National Association of Realtor’s (NAR) will announce the official index value at 14:00 GMT. A higher-than-projected gain will support greenback’s demand.

Technical view

According to Binary Tribune’s daily analysis, in case USD/MXN manages to breach the first resistance level at 12.8921, it will probably continue up to test 12.9071. In case the second key resistance is broken, the pair will probably attempt to advance to 12.9263.

If USD/MXN manages to breach the first key support at 12.8579, it will probably continue to slide and test 12.8387. With this second key support broken, the movement to the downside will probably continue to 12.8237.