Trader Take – USDCOP Open Sept 25
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USDCOP opened lower yesterday before retracing as we saw outflows from RM and mixed flows from HFs. The currency closed almost unchanged, underperforming peers during the session. Interbank volume yesterday was again above average at USD 1.08Bn vs. 847 30 day average. Yesterday, congress rejected the budget plan. Hence, for the first time in history, the budget will be set by decree defined by the government. President Petro has announced that the budget will be set at COP 523Tn which, as per MoF needs COP 12 Tn of extra funding. There are doubts about the amount that can be presented, but with no precedents, the government will push for the full size original budget. I do not expect a major market impact in the short term as the market has already priced a wider budget and the government is capped at COP 523Tn figure. We continue seeing month-end flows during this week and some position reduction from RM clients. Given the local and global environment, I continue to prefer being long USD with a good entry opportunity on dips close to 4,100 and target around 4,275. Currently market is testing dma20 (4179) as resistance. I will be watching 4,200 as next resistance while 4,110 is the short term support. USDCOP should trade mainly flow driven during the session. |