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CLP Leads Gains In Latam After Soft US CPI Data

CHILE
  • Seeing a notable move lower in USDCLP following the softer-than-expected US CPI data, with the pair currently 1.3% lower on the day. Given the obvious political and fiscal risks which are weighing on MXN and BRL, the rally in CLP is providing a cleaner reaction to the US data, which is also benefitting from a 2% rebound in copper prices today.
  • For USDCLP, a bear trend in USDCLP remains intact and the earlier recovery appears to be a correction, for now. Important resistance at the 50-day EMA has been well respected and the average currently intersects at 926.46.
  • For bears, the break in early May of support at 935.63, the Mar 15 low, marked an important technical breach and highlighted a stronger reversal. Attention remains on 886.96, the 76.4% retracement of the Dec 1 ‘23 - Feb 26 bull leg, a clear break of which would open 870.45, the Dec 29 low.

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