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Price Signal Summary - USDBRL Extends Bounce Above 50-Day SMA

LATAM FX
  • The trend outlook in USDMXN is unchanged and remains bearish. The move lower across the second half of December reinforces bearish conditions – with the pair eventually breaching support at 17.0340, the Nov 27 low. This break lower confirmed a resumption of the downtrend and paves the way for weakness towards 16.6262, the Jul 28 low. The most recent recovery appears corrective for now with initial firm resistance not seen until 17.5653, the Dec 5 high.
  • The most recent recovery for USDBRL has seen the pair return to a familiar trading range between 4.85-4.95. Overall, the trend direction remains down, however, the pair has pierced above initial resistance at the 50-day SMA. A clear break of 4.9771, the Dec 13 high, would ease bearish pressure, potentially exposing 5.0696, the Oct 31 high. For bears, recent weakness did result in a breach of 4.8590 support, the Nov 7 low and 4.8000 remains the key level of note on the downside.
  • The trend outlook in USDCLP remains bearish, and the recent recovery is considered corrective. Initial resistance is at 902.28, the Dec 26 high. A clear break would signal scope for a stronger correction near-term, towards 900.00. Note that key resistance is at 924.67, the Nov 13 high. For bears, key short-term support at 873.00, the Nov 3 low, was recently cleared. The break of this level strengthens a bearish threat and signals scope for a stronger retracement towards 837.45, the Aug 25 low.
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