USD/ARS: Disastrous Wrong Direction Not Ending in Argentina

Robert Petrucci

It is not a laughing matter, but speculators who consider selling the USD/ARS should consider seeking psychological analysis.

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The USD/ARS continues to produce a solemn and disastrous one-way direction in which the Argentine peso bleeds value. Technical charts can still be contemplated, and there exists a potential for the occasional small incremental bearish movement to occur, but traders who actually try to sell the USD/ARS potentially need to seek the help of professionals.

Unless you are an ‘inside’ member of the Argentina government and know something no one else knows, buying the USD/ARS remains the only viable trading position. However, there are no guarantees when speculating and traders need to understand the rules their brokers have regarding the USD/ARS. They should check on overnight carrying costs, spreads, and importantly, traders need to use limit orders when pursuing the upward momentum of the USD/ARS which has proven unrelenting.

To many outside observers, the Argentine government continues to pursue wrongheaded legislation and economic policy. A couple of weeks ago, Argentina passed a new one-time tax on its citizens who have a net worth of approximately 2.4 million USD and above. Members who voted on passage of the bill opined the tax will help raise money to pay for the growing debt caused by coronavirus. However, what the government also must acknowledge, but doesn’t seem to understand, is that rich citizens now have another reason to flee for Uruguay and other nations with better economies.

Data shows that Argentina is suffering from massive inflation and is stumbling towards economic ruin, and growth at this juncture is merely wishful thinking. Traders who can buy the USD/ARS should be careful and they will need to be patient. Stop loss ratios should be used and traders should check on their positions habitually. Speculators should cash out winning positions when they occur and then consider opening new positions afterwards to avoid the high costs of carrying charges for overnight trades which can produce sizable fees.

The Argentine peso remains a bizarrely mismanaged and weak currency. Argentina is not about to fix its economy anytime soon, and the government may actually decide on a devaluation when no one is anticipating the move. Traders who use stop loss ratios correctly and pursue buying positions of the USD/ARS can still take advantage of the Forex pair’s upward momentum.

Argentine Peso Short-Term Outlook:

  • Current Resistance: 83.400
  • Current Support: 83.100
  • High Target: 80.100
  • Low Target: 83.600

USD/ARS chart

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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