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Approaching Major Support


Inflation Concerns Underpin Bear Steepening


Bullish Theme

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  • USDMXN maintains a bearish tone and traded lower again yesterday.
    • A bearish theme follows the recent clear break on Mar 31 of trendline support drawn off the Jan 21 low.
    • The pair has also cleared the Mar 18 low of 20.2829 - a former key support level and this strengthens a bearish argument. The focus is on 19.8924, Feb 15 low. A break would open 19.5494, Jan 21 low.
    • On the upside, resistance is at 20.3805, Apr 5 high.
  • USDBRL has pulled back from recent highs.
    • The pair last week traded below trendline support drawn off the Dec 14 low but has failed to confirm a clear break to signal a stronger reversal and expose support at 5.4499.
    • Note too that price action since Mar 9 appears to be trading within a triangle. This pattern is potentially a bullish one - a break of 5.7558, Apr 13 high would confirm a bullish pattern breakout and signal scope for a climb towards 5.8743, Mar 9 high and a key resistance.
    • Key near-term support is unchanged at 5.5396, Apr 8 low.

  • USDCLP remains weak and is trending lower. The pair has probed a key support at 699.19, Feb 24 low. This signals scope for weakness towards the primary support at 693.00, Jan 6 low. A break of this level would confirm a resumption of the broader downtrend that started March 2020. Initial resistance is at 714.50, Apr 13 high.