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CHILE: USDCLP Just Below Key Resistance, BBVA Recommend Short

CHILE
  • USDCLP ended last week on a firmer note, trading within close proximity to its recent highs as copper prices consolidated their weekly declines. Attention is on key short-term resistance and a bull trigger at 956.73, the Jun 27 high. Clearance of this level would confirm a resumption of the bull cycle.
  • BBVA believe the recent USDCLP strength is looking a bit extreme and have recommended going short at 950, with a stop at 985 and a target at 900. They note that previous highs into 980 are less justified due to a less dovish BCCh than expected earlier in the year, and copper prices above the 1Q24 range of USD380-400 (COMEX). 
  • Additionally, BBVA say the BCCh’s positioning tracker on offshore NDFs shows short CLP positioning at USD6bn. The past high in short CLP positions around March and April 2024 was closer to USD7-8bn. BBVA do not expect it to reach those extreme levels as a large portion of that positioning was driven by regional carry trades that have lost their appeal off the back of higher global FX volatility.
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