The Argentine Peso remains one of the weakest currencies in the world. The nation’s government repeatedly suggests that instead of allowing the Argentine economy to be free, it will actually impose more regulations and stronger capital controls. The citizens of Argentina have unfortunately experienced unworthy governments before and their skepticism regarding promises of better days ahead made by politicians is known.
A glaring example regarding the lack of belief in Argentine official policy is the reminder the black market exchange rate to buy US Dollars on the streets of Argentina’s major cities remains absurdly higher than the government’s mandated value. The government’s rate which is used by forex platforms remains under siege too as bullish momentum is evident to all. However, the government’s official rate of around 73.650 as of trading this morning is far below the amount of Argentine Peso’s collected when US Dollars are sold on the black market.
Speculators who want to buy the USD/ARS on forex platforms need to understand the values they are trading are not transparent and that a lack of volume within the actual marketplace can cause volatility. The Argentine Peso has steadily been losing value to the USD and this is unlikely to change. Support levels for the USD/ARS have been rising incrementally long term and this trend is will continue in all likelihood.
So why isn’t buying the USD/ARS a simple task and always a profitable trade? A speculator needs to practice patience for the Argentina government to admit further erosion is necessary for the official exchange rate. The Argentine government feels it needs to show some semblance of stability even if outside observers do not believe a word they say.
Speculators willing to buy the USD/ARS should use limit orders and have the patience to hold their positions for several days to see the direction they want to emerge. Waiting for downward reversals which test support levels is a solid way to enter a USD/ARS buying position. Strong knowledge of risk management is recommended too, particularly regarding carrying charges which can add to the costs of trading this forex pair for longer durations.
Argentine Peso Short Term Outlook:
Current Resistance: 73.900
Current Support: 73.350
High Target: 74.100
Low Target: 73.200
