Submerging Markets

Brazil, China and South Korean currencies all reversing vs USD at important levels.

A breakdown in any of these currencies might be enough to carry emerrging market ETFs through suppoort and into a larger correction.

Currency Checkup

Lula Cleared, Real Falls

More fuel for a dollar bull move. Looks like USDBRL 7.00 is coming if there's a new high. ZH: In Shocking Reversal, Brazil Supreme Court Annuls Lula Carwash Conviction, Setting Stage For His Return As President

In a stunning announcement that shocked even veteran banana republic experts, on Monday Brazil's Supreme Court annulled the convicted of former President Lula (full name Luiz Inacio Lula da Silva) convictions in Brazil's legendary Carwash corruption probe, clearing the way for the leftist leader to run for the nation’s top job for the third time if and when he so chooses.

Former president Lula was convicted of corruption in 2017, and left jail in late 2019 after a Supreme Court decision he couldn’t serve time as all appeals hadn’t been exhausted. He has repeatedly denied wrongdoing and has said he’s victim of political persecution.

Then on Monday, the federal court in the southern city of Curitiba had no jurisdiction over cases against the former president, Supreme Court Justice Edson Fachin wrote in a statement on Monday, annulling convictions for crimes such as bribery stemming from property upgrades in Atibaia and a beach-front triplex in the state of Sao Paulo.

Does Brazil Matter Anymore?

This would have been a big deal before...has something changed or markets whistiling past the EM graveyard again?

Latin America on the Brink

A stroll through charts in Latin America.

First currencies. USDCLP (Chile). Base, test, boom.

USDBRL (Brazil). Base, boom.

USDMXN (Mexico). Fakeout to breakout.

USDPEN (Peru) has a long way to go if it follows Chile and Brazil's currencies.

Country ETFs argue for a bottom, but there are also topping patterns that point to huge declines if they complete.

Individual stocks follow. These aren't selected for any particular reason as a group. Some are airport stocks that could sink if coronavirus spreads, some have nice patterns. My focus is on banks because of the currency component.

Gold and King Dollar Rising With More In Store

USDMXN was the most bearish chart for the U.S. dollar the past few weeks. No more.

EURUSD bounced perfectly after filling its gap. If this topping pattern completes, we can switch to quoting it as USDEUR, since it could be going as high a 2.

USDBRL exploded after completing its base. Pullback likely given the run-up, but very bullish chart over the longer-term.

USDAUD same pattern, same breakout.

Last week I laid out the path to USDJPY 175. It has pulled back, but bounced off the former resistance.

The final currency that will complete a full blown dollar bull rally will be the yuan.

And the one to rule them all, gold. Gold has a massive basing pattern versus USD, which in turn has a massive basing pattern versus many major and minor currencies. Fiat is burning from the periphery to the core. Capital is flowing down the Exeter pryamid.

Latin American Currencies Ready To Stumble

All clear for global markets or are Latin American currencies about to light the next phase of the dollar bull market?

Bonus chart USDCNH.