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Price Signal Summary: USDBRL Challenges Key Short-Term Support

  • USDMXN is unchanged and continues to trade near its recent highs. Recent gains are still considered corrective and the trend outlook remains bearish. This follows the sell-off since Nov 26 that established a sequence of lower lows and lower highs. Attention is on 20.2517, Nov 9 low and 20.1196, Oct 26 low. The latter is a key support. Note however that the pair has breached resistance at 20.7603, Jan 6 high. The break of this hurdle highlights the possibility of a stronger short-term reversal. The next resistance is seen at 20.9954, 38.2% of the downleg between Nov 26 and Jan 18.
  • USDBRL maintains a softer tone and price is again challenging 5.3885, the Nov 11 low. A clear break of this key support would open 5.3249, 50.0% of the Jun - Oct rally last year. An initial firm resistance has been established at 5.5245, the Jan 24 high. A break above this level would ease bearish pressure.
  • The USDCLP trend direction remains down and recent short-term gains are considered corrective. Scope is seen for a move towards 788.22, the Nov 10 low ahead of 783.23, the 50.0% retracement of the May - Dec 2021 upleg. Initial firm resistance is seen at 818.33 the 20-day EMA.

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