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Price Signal Summary - Recent USDBRL Bounce Considered Corrective

LATAM FX
  • USDMXN remains above 18.5080, the Feb 2 low. The trend outlook is bearish and the latest recovery is considered corrective - for now. However, resistance at 19.1091, the Nov 19 high, has been cleared. An extension higher would strengthen a bullish theme and signal scope for a stronger short-term recovery, towards the 19.40 handle and 19.4804, the 38.2% retracement of the Jul 14 2022 - Feb 2 bear leg. On the downside, key support and the bear trigger is at 18.5080.
  • USDBRL is holding on to its recent gains following the rebound off last week’s low of 4.9410 (Feb 2). Despite the recovery, the near-term outlook remains bearish and the bounce is considered corrective. The pair has recently traded below support at 5.0108, the Aug 29/30 low and a key support. A clear break would represent an important bearish development and confirm a broad range breakout. This would open 4.8853, 76.4% of the May 30 - Jul 21 2022 bull leg. Initial firm resistance to watch is at 5.2557, the Jan 19 high.
  • The USDCLP outlook remains bearish despite the most recent recovery. The break lower last week confirmed a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs. The 800.00 handle has been breached and this opens 771.89, the Mar 29 2022 low. On the upside, initial resistance is seen at 810.56, the 20-day EMA. Resistance at the 50-day EMA intersects at 841.15.
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