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Price Signal Summary: USDBRL Still Bullish Despite The Most Recent Pullback

LATAM FX
  • The USDMXN continues to consolidate near its recent lows. The short-term outlook remains bearish following the sell-off that started Nov 26 and 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 trend conditions remain bullish despite the most recent pullback. The recent recovery early January from below the 50- and 20-day EMAs is a bullish development and attention remains on resistance at 5.7563, the Dec 21 high and bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 5.8064, the Mar 29 high. On the downside, a clear break of support at 5.5573 the bull channel base drawn from the Jun 25 low, is required to threaten the trend.
  • USDCLP remains in a bearish corrective cycle. 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 is at 856.64, the Jan 4 high.
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