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Solid Bounce For USDCLP Amid Underlying Bullish Technicals

CHILE
  • After a negative open for USDCLP on Tuesday, the pair subsequently sold off to session lows of 861.77, highlighting the more benign backdrop for risk sentiment and higher copper futures. However, the turn higher for US yields throughout the US session and the underlying short-term bullish technicals have prompted a solid bounce. USDCLP is now attempting to bridge the gap to Monday’s closing price of 870.08.
  • CLP, COP and PEN are all tracking much closer to unchanged levels on the day and have been unable to take advantage of the gains made by regional peers (MXN & BRL), although it is worth noting that COP was closed on Monday.
  • USDCLP traded to a fresh cycle high last Friday. The gap higher, on Jul 31, resulted in a break of 837.15, the Mar 17 high and a key resistance. The subsequent climb reinforces a bullish theme and the focus is on 886.62, the 50.0% retracement of the Sep 26 ‘22 - Feb 3 bear leg.
  • First support to watch is 851.63, the 20-day EMA. The 50-day EMA lies at 832.69.

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