Inside the Currency Market: MXN, BRL, CLP

MXN achieved 17.0975 highs and lifetime highs never before seen dating to 1950’s. USD/BRL at current 3.9726 is also lifetime highs and also dated to 1950’s. BRL’s September monthly average was 3.8690 and 3.5113 for August. USD/CLP (Chile) at current 701.40 was last seen August 2003. The August monthly average was 701.77. In 1975, the monthly USD/CLP average was 4.91. The lifetime highs for CLP is 763.70. Only 13 times has CLP seen 700 exchange rates and that was the period from August 2002 – June 2003 when price ranged between 700.00 – 763.00. CLP is important because its a Copper currency since the vast majority of the world’s Copper derives from Chile. Current Copper price at 2.279 is at the lower end of the 1 year range between 2.228 -3.119.

MXN price July 2014 was 12.9755, today lifetime highs were seen at 17.0975. September’s monthly average is 16.8011 and 16.5437 for August. September 2014, MXN monthly average is 13.2336, August 2008 is 10.1030 and September 1983 is 0.1364. USD/CLP Monthly average in August 1983 is 89.46 while USD/BRL in August 1983 is 0.0409. The continuous 40 year uptrend in MXN, BRL and CLP appears to be rolling ahead particularly MXN.

August monthly Inflation runs 0.21, 2.59 annual while Core runs 0.20 and 2.30 annual. 83% Mexico exports are shipped to the United States. Economically, Mexico is doing fine despite many political problems. The ruling PRI Party under Pena Nieto have like a 30 approval rating, the Finance Minister- Luis Videgaray, Pena and his wife are under accusations from ‘funny” house purchases from a Mexican government contractor.

The importance to MXN is its a forward indicator to EUR/USD and a far better insight than USD/CHF, USD/CAD or even USD/JPY because the Bank of Mexico sets prices long before the Euro.

MXN. Bottom. 16.8747. Range break above 17.0018 and 17.0442, Below 16.9171, 16.7899. Overbought sell point 17.1011, failure point 17.0154. Strategy. Longs above 16.9594, Target 17.1011 then reverse short to 17.0302, at 17.0154 failure point then short to 16.9874. Points on the way up, 17.0103, 17.0154, 17.1011.

Shorts below 16.9594, Target 16.9170. Watch here for reversal to 16.9594. Points on the way down, 16.9450, 16.9425, 16.8747 Bottom.

Brian Twomey, Inside the Currency Market, btwomey.com

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