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Price Signal Summary: USDBRL Pull Back From Recent Highs Extends

LATAM FX
  • The USDMXN is unchanged and continues to consolidate near its recent lows. The short-term outlook is bearish and this follows the sell-off that started Nov 26, with short-lived corrective spells. Attention is on support at 20.2517, Nov 9 low and 20.1196, Oct 26 low and a key support. On the upside, resistance is seen at 20.7603, Jan 6 high where a break would suggest a base and also confirm a break of the 50-day EMA.
  • USDBRL has continued to pull back from recent highs and yesterday breached support at 5.5477, the Dec 30 low. The pair has also cleared the 20- and 50-day EMAs this week. While the move lower is considered corrective, the break of various support levels suggests scope for a deeper short-term pullback. The focus is on 5.5184, Dec 9 low where a break would open 5.3885 further out, the Nov 11 low. Key resistance is unchanged at 5.7563, the Dec 21 high.
  • USDCLP remains in a bearish cycle that is likely a correction. Last week’s sell-off resulted in a breach of trendline support drawn from the May 10, 2021 low. Furthermore, the 50-day EMA has been breached and this suggests scope for a deeper pullback towards 818.65 next, Dec 1 low. For bulls, a resumption of gains would open the bull trigger at 876.15, the Dec 20 high. Initial firm resistance however is at 856.64, the Jan 4 high.
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