Inside the Currency Market: USD/MXN

MXN. Target 16.3118. How confident is this target, none, zilch. This says we are still a little off in our targets. I see exactly what’s going on. Better target is long to 1.2567 then reverse short. Should this target miss then 16.2704, 16.2842. Price must cross above 16.2025. Point is vital because its a range point. On the way up, 16.2049, 16.2255, 16.2462, 16.2567, 16.2704, 16.2842. Incase, shorts need a break of 16.2024 to target the range bottom at 16.1214. Don’t marry the trades.
Bottom 16.1214. Range break below 15.8833, above 16.5265. The ranges are wide. Ranges are wide for all our currency pairs and one main reason why EUR missed this morning. Usually takes 1 day to achieve normalcy. But note how our trades are within overall ranges.

MXN Forwards are found today between 16.2835 and 16.1214.

Brian Twomey, Inside the Currency Market, btwomey.com

Inside the Currency Market: Mexico Trade

Intriguing was the 83% of manufactured goods exported to the US and a severe drop in oil exports since 2004. Mexican exports to the US bottomed in 2008 at Minus USD 3292.30 million in October 2012 and peaked in 2013 – 2014. March 2013 saw the peak at 1710.25 USD millions. Never perfectly exact but a great source is Trading Economics who reports the average for exports at minus 237.14 million USD between 1980 – 2015. Manufactured products to some degree is lumped together as certain products are not separated. For example, mining is listed as mining or mining products. My old friend from Thomson Reuters reported for many years that Mexico produces the world’s Silver due from the largest Silver mines in the world. He also reported Cement was a large aspect of exports. Are both statements still true today from just 2 or 3 years ago is unknown, for now. A few stats from the Peak periods and derived from the US and Mexico Trade Offices.

2012. Goods and Services accounted for a total of 535 USD billions. US Exports were 243 billion and imports from Mexico was 293 billion with a deficit of 49 billion USD. Private sector services in imports and exports totaled 4.2 billion USD in 2011. Service exports totaled 27 billion, imports 15 billion with a USD surplus of 12 billion in 2012.

2013. Mexico was the 2nd largest US goods export market. US goods exports to Mexico in 2013: 226.2 billion, up 4.7% or 10.2 billion from 2012 and up 132% from 2003, up 444% since 1993 pre NAFTA. US exports to Mexico was 14.3% overall US exports in 2013. Top exports 2013, Machinery 38.2 billion, Electrical machinery 36.7 billion, Mineral, Feul and Oil 23.0 billion, vehicles 21.6 billion and Plastics 15.3 billion. US Agricultural exports, 18.1 billion and 3rd largest market. Corn 1.8 billion, Soybeans 1.5 billion, Dairy 1.4 billion, pork and Pork products 1.2 billion, meat 1.2 billion.
US exports private commercial 27.4 billion in 2012, up 16.3% since 2003, up 6.8% since 2011.

Imports 2013. Mexico was 3rd largest supplier of goods to US in 2013. Imports = 280.5 billion 2013, up 1% or 2.9 billion from 2012, up 103% since 2003, up 603% since 1993 Pre HAFTA. imports overall 12.4% 2013. 5 largest categories: Vehicles and parts 59.6 Billion, electrical machinery 57.4 billion, machinery 42.6 billion, mineral, feul and oil 34.4 billion, optical and medical equipment 10.7 billion. US imports Agriculture: 17.7 billion 2013, 2nd largest supplier. Veggies 4.6 billion, fresh fruit minus bananas 3.1 billion, wine and beer 1.9 billion, snack foods including chocolates 1.5 billion.
US imports private commercial services = 15.1 billion, in 2012, up 6.6% or 1.2 billion from 2011, up 30% since 2002, up 104% from 2003.
Trade Balance

Goods trade deficit with Mexico 54.3 billion in 2013, 11.9% decrease or 7.3 billion vs 2012. US had services surplus 12.2 billion in 2012, up 4.4% in 2011.

FDI

Foreign Direct investment in Mexico 101.0 billion in 2012, up 11.3 % since 2011. Major categories mabufacruring, non bank holding companies, financial services and insurance. Mexico FDI 14.9 billion 2012, up 14% since 2011. manufacturing and banking are two most vital categories. Sales and services in Mexico 37.6 billion, Mexico firm sales = 4.9 billion.
Mexico trade to GDP ratio 2011 – 2013 64.6%. Anti Dumping claims in WTO in 2013 = 42, 37 trade disputes, 23 trade complaints.

Brian Twomey, Inside the Currency Market, btwomey.com

Inside the Currency Market: EUR/USD

Okay overbought this morning was not fully addressed and the top was broken. My dam fault as I rushed to get the trade out. I’m frankly happy to see this because its an extremely rare day when t happens. Overbought and target was actually at exactly 1.1016. That was the top I saw this morning and the point where the reversal should’ve come. We’ve had 30 days of perfection in what 150 trades without a problem at overbought points. As I factor the next point above 1.1016 which means seriously stratospheric overbought, that point comes in at 1.1042 this morning and 1.1046 this afternoon. The intervals above comes in between 1.1042 and 1.1068 and 1.1072 and 1.1098 this afternoon. The top for the day is here so shorts will be fine. A currency price is about location and I know exactly at all times the locations of every price so its okay. This was extremely nasty what occurred this morning. To offer context, I believe it was oh 3 months ago on a Non farm payrolls day when I saw a nasty move of this caliber. Its extremely rare. As well we’ve seen slight misses on non uniformity days due to numbers that come in off kilter. That happens but its not as big a deal as today.

Shorts must clear 1.1033, 1.1021, 1.1001. 1.0999. Then we must watch closely as prices must break below 1.0989 to target the rising bottom at 1.0934 and up from 1.0908 this morning. 1.1033 is an important break below as that will solidify the top at 1.1042 and 1.1046.

Thank you very much to my friends at Thomson Reuters for excellent reviews on MXN trades and reported data over the past month.

More trade ahead.

Brian Twomey, Inside the Currency Market, btwomey.com

Inside the Currency Market: EUR/USD

Sunday trades recap quickly. NZD/USD sell at 0.6531 dead stopped at 0.6537 then reversed short. Bottom at 0.6581 broke to 0.6557. MXN. Longs Dead stopped at 16.2772, I said sell 16.2735. Bottom I said 16.0836, bottom held at 16.1884. GBP/USD I said sell 1.5531, Dead Stopped at 1.5545. A Reversal attempt later Dead Stopped again at my reported 1.5505. Bottom I said 1.5392, it held at 1.5428. EUR/USD Reversed at 1.0981, my sell point was missed but I mentioned the top was dam close. Bottom I said 1.0908, held at 1.0926. Do not look at these trades as misses. They were so dead on perfect. More later.

EUR/USD. The Top in EUR is here for now, the Resistance above is rock rock solid. The downside again is wide open with plenty of daylight. Again if an interest rate hike is coming for Yellen, I will know long in advance so we’re ready.

Bottom 1.0905. Range break below 1.0760, above 1.1084. Overbought Sell points 1.0991, 1.0998.1006, Target to bottom 1.0905. Above must break 1.0961, may not be seen. Then 1.0969, 1.0991, 1.0998, 1.1006.

Brian Twomey, Inside the Currency Market, btwomey.com