Latin American Outlook: Trade Exotic Binaries

Brazil's inflation likely breached 9.0% yoy (0.9% MoM) in June the highest level since 2003.

Chilean economic growth likely stalled in May which consequently should add downside risks to our Q2 2015 forecast.

In a recent communication with deputy of Banxico, it hints that they could be forced to follow Fed closely. Banxico could opt to pre-empt potential volatility and its impact on the MXN rather than wait to see its impact on the domestic economy (prices in particular). Accordingly, Banxico has revised its policy meeting dates so that they come soon after FOMC meetings.

Global market interest will also be the minutes of the FOMC's June meeting. Coming in the aftermath of a meeting with a press conference and published economic projections, these are of more limited incremental value. Nevertheless, alongside the slew of upcoming Fed speakers - including Williams later this evening and Yellen on Friday - the impact of Grexit concerns through the FOMC's lens of financial and international developments will be of particular interest.

Latin American Trade Calls:

USDBRL: This exotic pair has broken resistance at 3.1928, while RSI converge price rallies and stochastic states %K line crossover at around 65 levels but yet to reach overbought territory. We foresee binary buying chances for 15-20 pips during early sessions of the US.

USDCLP: As per our fundamental forecasts, now technicals also suggest no reasonable points that could drive Chilean peso's gains, instead back to back bull candles are figured out on daily charts, leading oscillators have also been bullish bias, no trace of alerting signals despite the pair reaches upper Bollinger band at 647.0719. So we look at buying ATM binary calls rather than puts.

USDMXN: MXN has been diluted on yesterday to drag upto the all-time lows of 15.8695, dropped over by the Greek debt crisis. USD/MXN reversed gains to trade slightly lower at 15.8048. Technicals suggest USD/MXN long-term up-trend is intact. So trade view is quite simple buy on dips.