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You are here: Home > Blog > Forex Emerging Market - January 2018

Forex Emerging Market - January 2018

January 24, 2018

The month of January was quiet with some currencies that emerged against the US dollar.

The weakness of the greenback was in fact spread worldwide, but from the beginning of the year those who gained the most in the emerging world were the Mexican Peso (+ 6%) and the Colombian Peso. Good results  also for the Brazilian Real (+ 3%) and the Russian Ruble (+ 2%). Great expectations for the end of the month meeting of the two most important central banks in the world with focus mainly on the Federal Reserve on January 31st. No tension on commodities nor on spreads: a golden moment for the emerging currencies that in the last 12 months have reached a nice result against the Dollar (+ 8%).

Let's now go into details concerning the trend of the main exchange ratios.

USDCNY

UsdCny suffered the rather hostile attitude towards the US government bonds put in place by China about its currency reserves and also the German decision to switch (for marginal amounts now) between Treasury and Chinese securities within their reserves. Considering the support level reached by UsdCny, it is better to have a cautious attitude here.

As we can see from the chart, the trend line that drives the rise since 2014 and the 61.8% of Fibonacci positioned at 6.40 passes on the current level. Rsi-price divergences are also maturing on the weekly chart that crosses the tops of 2015. All clues requiring a more conservative approach to the Yuan.

usdcny2401.jpg

USDTRY

The Turkish Lira seems to be on hold in the strengthening process carried on from the beginning of 2018. After the double top achieved at 3.92 (tops of January 2017 and January 2018, but also January 2016) UsdTry has turned downward stopping its run at 3.73. Our point of reference is the 65-week moving average (currently at 3.61) that we do not believe will be violated, but will still represent a pole of attraction in the next few weeks.

usdtry2401.jpg

USDZAR

The market seems to have found a basis in UsdZar that could hinder the ambitions of the Rand for the next few months. Area 12 has represented the main reference of resistance for UsdZar for years, violated in 2015 and a support now. A first downtrend attempt and a second one in these weeks confirm the value of this support. The Fibonacci fan lines clarify even better the notion of relevance of area 12. In case of a yielding it could fall down another figure, but in this case we should buy UsdZar.

 

usdzar2401.jpg

USDMXN

Best performer of the beginning of this year, the Mexican Peso is creating a quite interesting potential bullish head and shoulder technical structure that could re-launch Mxn ratings. UsdMxn has found a very interesting support at 17.60 that becomes the potential neck line of this figure.

This week will represent the fourth downtrend week but oscillators are still far from the oversold point and let us think to the chance of a trend fall below the uptrend line. In the event of a break of 17.75 the bearish prospects on UsdMxn would be much stronger.

usdmxn2401.jpg


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