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Price Signal Summary: USDCLP Trend Needle Points South

LATAM FX
  • USDMXN has again traded marginally lower but has not yet signalled a clear resumption of the downtrend. The outlook remains bearish though and further downside is likely. A bearish theme follows the sell-off that started Nov 26, with short-lived corrective spells clearly highlighting bearish sentiment. Attention is on the support at 20.2517, Nov 9 low and 20.1196, Oct 26 low. The latter is a key support. On the upside, resistance is seen at 20.7603, Jan 6 high where a break would suggest a base and confirm a break of the 50-day EMA.
  • USDBRL is trading at recent lows following last week’s extension lower that resulted in a break of support at 5.5477, the Dec 30 low. The pair has also recently cleared the 20- and 50-day EMAs. The break of these various support levels (including a print below 5.5184, Dec 9 low) suggests scope for a deeper short-term pullback. A clear break of 5.5184 would open 5.3885 further out, the Nov 11 low. Key resistance is unchanged at 5.7563, the Dec 21 high. Initial resistance is at 5.6161, the 20-day EMA.
  • USDCLP remains in a bear cycle and further weakness is likely. The recent leg lower resulted in a breach of trendline support drawn from the May 10, 2021 low and a break the 50-day EMA, suggesting scope for a pullback towards 798.65 next, Nov 22 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 837.35, the 20-day EMA.
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