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Price Signal Summary: USDBRL Needle Points South

LATAM FX
  • USDMXN remains in a range with the pair unable to close outside of 19.80-20.00 band in the past 7 sessions. Activity since Jun 25 still appears corrective in nature and this is in line with an overall bearish theme that still dominates. Attention is on 19.7059, Jun 25 low and 19.5987, the Jun 9 low. The nearest resistance remains 20.25, the July high with the next firm resistance at 20.3504, 61.8% of the recent Jun 18 - 25 downleg.
  • USDBRL has moved lower since peaking at the beginning of the week at 5.2742. With a cluster of highs forming between 5.27-5.31, a resistance band appears to be developing in strength. After recently probing support at 5.0550, Jul 15 low, a clear break below here and the July 29 lows of 5.0416 would signal scope for a deeper short-term pullback and expose 5.00 plus the Jun 25 low of 4.8934. The latter is a key support. For technical bulls, the trigger for a resumption of gains is 5.3130, the Jul 8 high.
  • USDCLP's progress has stalled but recent gains are being consolidated and conditions remain technically bullish. The most recent breach of 777.00, the Nov 24 2020 high, further cements the bullish outlook and the underlying uptrend. Above the 782.40 high, strong resistance in the form of the 50% retracement from the March 2020 – May 2021 price swing comes in at 784.59. Initial support is at 753.10, Aug 2 low.
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