Forex Market: USD/MXN daily trading forecast

Yesterday’s trade saw USD/MXN within the range of 14.3689-14.7903. The pair closed at 14.5604, losing 1.25% on a daily basis.

At 8:09 GMT today USD/MXN was up 0.02% for the day to trade at 14.5476. The pair touched a daily high at 14.5993.

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 December 12th, probably increased to 295 000 from 294 000 in the prior week.

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 decreased to the seasonally adjusted 2 435 000 during the week ended on December 5th, from 2 514 000 in the previous week. The latter has been the highest number of continuing jobless claims since the week ended on August 16th, when 2 528 000 claims were reported. 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.

Services data by Markit – preliminary

Activity in the US sector of services probably expanded in December, with the corresponding preliminary Purchasing Managers Index coming in at a reading of 56.8. In November the final seasonally adjusted PMI stood at 56.2, or the lowest since April, and down from a preliminary value of 56.3. The PMI is based on data collected from a representative panel of more than 400 private sector companies, which encompasses industries such as transport and communication, financial intermediaries, business and personal services, computing & IT and hotels and restaurants. Values above the key level of 50.0 indicate optimism (expanding activity). Higher-than-expected PMI readings would support the US dollar. The preliminary data by Markit Economics is due out at 14:45 GMT.

Conference Board Leading Economic Indicator

The Conference Board Leading Economic Index for the United States probably increased 0.5% in November compared to a month ago, according to the median estimate by experts. In October compared to September the index gained 0.9%, or the largest monthly increase since July, when it climbed 1.1%. It encompasses a variety of economic indicators, which signify possible changes in overall economic activity. The index is comprised by the following components: average weekly hours in manufacturing, average weekly initial claims for unemployment insurance, manufacturers’ new orders, consumer goods and materials, ISM Index of New Orders, manufacturers new orders, non-defense capital goods excluding aircraft orders, building permits, new private housing units, Stock prices, 500 common stocks, Leading Credit Index, interest rate spread, 10-year Treasury bonds less federal funds, average consumer expectations for business conditions. Better-than-expected performance of the index is usually dollar positive. The Conference Board will release the official data at 15:00 GMT.

Philadelphia Fed Manufacturing Index

The Philadelphia Fed Manufacturing Index probably fell to a reading of 27.0 in December from 40.8 index points during the previous month. The latter has been the highest level since March 2011, when the indicator was reported at 43.4. The index is based on a monthly business survey (the Business Outlook Survey), measuring manufacturing activity in the third district of the Federal Reserve, Philadelphia. Participants give their opinion about the direction of business changes in overall economy and different indicators of activity in their companies, such as employment, working hours, new and existing orders, deliveries, inventories, delivery time, price etc. The survey is conducted on a monthly basis since May 1968. The results are presented as the difference between the percentages of positive and negative projections. A level above zero is indicative of improving conditions, while a level below zero is indicative of worsening conditions. Lower-than-expected index readings would have a bearish effect on the greenback. The Federal Reserve Bank of Philadelphia is expected to release the official results from the survey at 15:00 GMT.

Mexico

Retail Sales

Mexican index of retail sales probably rose at an annualized rate of 4.35% in October, according to the median forecast by analysts, following a 4.50% surge in September. Monthly retail sales probably increased 0.55% in October, after a 0.7% drop in the prior month, which followed three consecutive monthly gains.

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 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 is, in general, bearish for the peso. Mexicos National Institute of Statistics, Geography and Informatics (Instituto Nacional de Estadística y Geografía) is to release its report on retail sales at 14:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 14.5732. In case USD/MXN manages to breach the first resistance level at 14.7775, it will probably continue up to test 14.9946. In case the second key resistance is broken, the pair will probably attempt to advance to 15.1989.

If USD/MXN manages to breach the first key support at 14.3561, it will probably continue to slide and test 14.1518. With this second key support broken, the movement to the downside will probably continue to 13.9347.

The mid-Pivot levels for today are as follows: M1 – 14.0433, M2 – 14.2540, M3 – 14.4647, M4 – 14.6754, M5 – 14.8861, M6 – 15.0968.

In weekly terms, the central pivot point is at 14.6630. The three key resistance levels are as follows: R1 – 15.0400, R2 – 15.3192, R3 – 15.6962. The three key support levels are: S1 – 14.3838, S2 – 14.0068, S3 – 13.7276.