MXN (PESO) Weekly review 31Oct-4Nov

Fundamental summary

The Peso was observed to be volatile in the past week. The main driving force for this volatility is the USA presidential run. The pair was seen to strengthen when Hillary odds increased in the polls. Relative to the USD, the Peso started to weaken when Trump’s odds increased. However, later in the week, we saw the Peso regaining strength when the polls showed Hillary dominance over Trump.Full story

GDP

The GDP YoY came out at 2% as expected by the market. This is a step down in growth as compared to 2.5% that was obeserved in the previous month release. The 2% growth is also the lowest since 2014 second quarter release of 1.8%. This drop is mainly affected by a 1% drop in the industrial output. GDP on quarterly basis has rose by 1% which is the highest since August 2014. Full story

PMI

PMI released was 51.8 which is slightly lower than 51.9 of September. The PMI value Marked the 37th consecutive month of growth in the factories.
The key contributing factors to expansion are: Production volumes expanded for the second month running, New order growth slowed, despite faster rise in export sales and Input cost inflation accelerated to seven-month high.
The export sales for October were supported by weak Peso to USD exchange rate. Full story

Gross fixed investments

The Gross Fixed Investment, which represents the costs incurred in machinery and equipment of domestic and imported, as well as construction, presented a real increase of 0.5% in the eighth month of this year compared to last July.

Upcoming news events: 11-14 November 2016

– Consumer confidence
– CPI
– Industrial Production
Economic calendar

Technical summary

USDMXN- The week started with the price continuing bullish. It retraced and took off from WPP and hit the bulls weekly target WR2 and made a week’s high of 19.54621 mid week. Despite the fundamentals, Pivot points theory suggested that there is a likelihood of it falling back to WPP.

USDMXN Daily

Price took off at MPP mainly following Trumps odds in the polls. The pair became bearish as Hillary dominated Trump. There is price contraction in a form of a wedge.

USDMXN H4

The price retraced to WPP early in the week, and bounced high to WR2 following Pivot points targets' theory. It then fell, making its way towards WPP. Price closed with a pin bar at confluence of support, 55 EMA 61.8 fib trend line support.

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