USD/CLP bulls take a breather, outlook still bullish


  • USD/CLP trades neutral at 884.35, with technical indicators flat.
  • The Chilean Central Bank kicking off its easing cycle contributes to the upward trajectory.
  • The Federal Reserve (Fed) is expected to deliver a hawkish pause on Wednesday. 


On Tuesday, the USD/CLP bulls are taking a breather after pushing the pair upwards by more than 3.82% in September and are consolidating gains at the 884.35 area.

Monetary policy divergences with the Federal Reserve (Fed) may explain the increase of the pair as since July, the Chilean Central Bank has already cut rates by 1.75%, and markets are discounting 1.50% more of easing in the remainder of 2023. The week's highlight for the CLP will be the release of the September 5 minutes on Friday, where investors will have a clearer outlook of the bank’s stance for the upcoming October and December meetings.

On the US side, rate swaps markets have practically priced in that the Federal Reserve (Fed) will hold rates steady at 5.25-5.50% on Wednesday. However, Chair Powell will try to convince the markets pausing won’t mean the end of the tightening cycle, leaving the door open for another hike. In addition, the fresh macro forecasts and the revision of the Federal Open Market Committee (FOMC) members' famous dot plots will be closely watched by investors to continue modelling their expectations.

 

USD/CLP Levels to watch 

 Considering the daily chart, the USD/CLP presents a bullish outlook. Despite turning flat, the Relative Strength Index (RSI) lies comfortably deep in positive territory, while the Moving Average Convergence (MACD) histogram prints rising green bars. On the other hand, the pair is above the 20,100,200-day Simple Moving Average (SMA), suggesting that bulls are clearly in command of the bigger picture.

 Support levels: 884.00, 882.00, 880.00

 Resistance levels: 895.00, 898.00, 900.00.

USD/CLP Daily Chart

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD weakens below 0.6650 amid firmer US Dollar, stronger US PMI data

AUD/USD weakens below 0.6650 amid firmer US Dollar, stronger US PMI data

The AUD/USD pair trades in negative territory for the third consecutive day around 0.6640 during the early Asian session on Monday. The downtick of the pair is backed by the stronger US Dollar after the optimistic US S&P Purchasing Managers Index data for June.

AUD/USD News

EUR/USD hangs near its lowest level since early May, seems vulnerable below 1.0700 mark

EUR/USD hangs near its lowest level since early May, seems vulnerable below 1.0700 mark

EUR/USD struggles to attract any meaningful buyers and is undermined by a combination of factors. Political uncertainty in Europe, along with Friday’s dismal Eurozone PMIs, seems to weigh on the Euro. The Fed’s relatively hawkish stance lifts the USD to a multi-week top and further acts as a headwind.

EUR/USD News

Gold holds below $2,350 on stronger US PMI data

Gold holds below $2,350 on stronger US PMI data

Gold price edges lower to $2,320 after retreating from two-week highs around $2,368 during the early Asian session on Monday. The stronger-than-expected US Purchasing Managers Index released on Friday weighs on the yellow metal.

Gold News

Base to decentralize further with fault proofs, testnet launch expected mid July

Base to decentralize further with fault proofs, testnet launch expected mid July

Base, a Layer 2 scaling solution by Coinbase has observed a surge in usage of the chain, amidst decline in fees. Several applications on the Layer 2 chain contributed to the rise in activity.

Read more

Week ahead: US PCE inflation the highlight of a relatively light agenda

Week ahead: US PCE inflation the highlight of a relatively light agenda

Core PCE inflation to test bets of two Fed rate cuts in 2024. Yen awaits BoJ Summary of Opinions, Tokyo CPI. Canadian CPI data also enters the spotlight.

Read more

Forex MAJORS

Cryptocurrencies

Signatures