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Price Signal Summary - Strong Bounce In USDBRL

LATAM FX
  • The trend direction in USDMXN is unchanged and remains bearish. Monday’s sell-off reinforces current conditions and once again marked a resumption of the current downtrend. This maintains the price sequence of lower lows and lower highs and note too that moving average studies are in a bear mode position, highlighting a clear downtrend. The move lower opens 16.2159, the 1.50 projection of the Dec 5 - Jan 8 - Jan 17 price swing. The 1.618 projection lies at 16.1238. On the upside, key resistance is at 16.6114, the 20-day EMA.
  • A bullish theme in USDBRL remains intact and last week’s cycle high reinforces current conditions. Today’s strong gains are a positive development and signals the end of the recent corrective pullback. Resistance at 5.0548, the Mar 19 high has recently been breached highlighting a resumption of the uptrend that started Dec 27. Furthermore, 5.0609, 61.8% of the Oct 6 - Dec 27 bear leg, has also been cleared. A continuation higher would open 5.0983, the Oct 20 ‘23 high ahead of the 76.4% retracement point at 5.1218. The 50-day EMA - at 4.9842 - marks the key support. A clear break of this EMA would threaten bullish conditions and expose 4.9187, the Feb 22 low.
  • The USDCLP medium-term trend condition remains bullish. The latest pullback is considered corrective - for now - and support to watch lies at 935.63, the Mar 15 low. A clear break of this level would highlight a stronger reversal and signal scope for an extension towards 922.80 initially, 50.0% of the Dec 1 ‘23 - Feb 26 bull leg. On the upside, a break of resistance and the bull trigger at 990.67, the Feb 26 high, would confirm a resumption of the uptrend and open 1000.00. Initial firm resistance is at 961.35, the 20-day EMA.
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