Broad USD Weakness Underpinning Regional FX Strength Post-NFP

LATAM FX Price Signal Summary – Firmer Risk Sentiment and Broad USD Weakness Underpinning Regional FX Strength

• The near-term outlook in USDMXN appears bearish and the pair is trading closer to its recent lows. After a period of consolidation and lack of follow through following some bullish reversal signals in December, USDMXN has failed to remain above its 50-day EMA. The resumption of weakness signals scope for a move towards 19.0401, a key support and the Nov 29 low.
• Despite USDBRL starting the year on a firmer note and clearing initial resistance at 5.3717, the Dec 14 high, key resistance levels at 5.5000 and 5.5296, the Nov 17 high have held well. The sharp reversal since Jan 04 has seen the pair trade to fresh lows on the week, placing the focus on key support which lies at 5.1183, the Dec 23 low.
• The USDCLP outlook remains bearish. Despite the inability to meaningfully break below support at $849.75, the Sep 5 low, short-term rallies continue to be technically corrective. A clear break would signal scope for weakness towards $807.85, the Jun 3 low. On the upside, initial firm resistance is at $889.16 the 50-day EMA.