May 20, 2024 12:57 GMT
Price Signal Summary - USDCLP Impulsive Bear Cycle Remains Intact
LATAM FX
- USDMXN remains in a bear cycle following the pullback from 17.3885, the Apr 25 high. Price is once again below the 20- and 50-day EMAs. A continuation lower would pave the way for a move towards the 16.50 handle and 16.2616, the Apr 9 low and a key support. For bulls, resistance at 17.3860, the Jan 17 high, has recently been tested. This level marks an important reversal trigger and a clear break, if seen, would be bullish and signal scope for a climb towards 17.6365, the 61.8% retracement of the Oct 6 - Apr 9 bear leg.
- The recent move lower in USDBRL, since Apr 16, appears to have been a correction. However, support around the 50-day EMA, at 5.0853, has also been pierced. A clear breach of this average would strengthen a short-term bearish theme and signal scope for a deeper retracement - this would open 4.9984, the Apr 10 low. Key short-term resistance has been defined at 5.1969, the Apr 30 high. Clearance of this hurdle would be bullish.
- The current bear cycle in USDCLP remains in play and last week’s extension lower reinforces current conditions. The recent break of support at 935.63, the Mar 15 low, marked an important technical breach and highlighted a stronger reversal. Sights are on 886.96, the 76.4% retracement of the Dec 1 ‘23 - Feb 26 bull leg. A break of this level would open $870.45, the Dec 29 ‘23 low. Initial key short-term resistance has been defined at 929.45, the 20-day EMA.
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