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Price Signal Summary: USDMXN Rallies But Pulls Back From Its High

LATAM FX
  • USDMXN has rallied to a high of 22.1550 but has since faced some resistance and is currently trading in the lower half of today's range. The trend outlook remains bullish following this week's strong gains and breach of a number of important resistance points. A resumption of strength would open the 22.50 handle. A strong short-term support is seen at 20.9790, Nov 3 high. Note that given the vertical nature of the most recent recovery, it would not be a surprise to see an increase in volatility near-term.
  • The USDBRL short-term outlook is unchanged and remains bullish. Firm support lies at 5.3885, Nov 11 low and the bull channel base intersects at 5.4022. The channel is drawn from the Jun 25 low. Clearance of these two levels is required to suggest potential for a stronger sell-off. This would expose 5.20. On the upside, resistance at 5.6068, Nov 5 high has been breached and this strengthens current bullish conditions plus signals scope for a climb towards the channel top at 5.7939.
  • USDCLP is firmer today and the pair has gapped higher. Although recent gains are encouraging for bulls, price remains below a key resistance. Recent activity has defined key directional triggers at 841.25, the Nov 18 high and 788.22, the Nov 10 low. Clearance of the support would set the scene for weakness towards 762.13, Sep 1 low while a breach of resistance at 841.25 would instead open 850.00 and further out, 878.86, the Mar 19 2020 high. From a trend perspective, the outlook remains bullish as long as support holds.
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