Classical technical analysis of Latin American market indices. Correlations in Latin American currencies (ARS, CLP, MXP) exchange rates with respect to DEM, GBP, JPY and USD

TL;DR

This paper applies classical technical analysis to Latin American market indices and explores currency exchange rate correlations, revealing complex and speculative behaviors in Latin American currencies against major currencies.

Contribution

It combines technical analysis of Latin American indices with an investigation of currency exchange rate correlations, highlighting complex behaviors.

Findings

Latin American indices show typical technical analysis patterns.

Currency exchange rates exhibit complex, often speculative, correlation behaviors.

Identified scaling ranges and exponents in currency exchange rates.

Abstract

The classical technical analysis methods of financial time series based on the moving average and momentum is recalled. Illustrations use the IBM share price and Latin American (Argentinian MerVal, Brazilian Bovespa and Mexican IPC) market indices. We have also searched for scaling ranges and exponents in exchange rates between Latin American currencies ($ARS$, $CLP$, $MXP$) and other major currencies $DEM$, $GBP$, $JPY$, $USD$, and $SDR$s. We have sorted out correlations and anticorrelations of such exchange rates with respect to $DEM$, $GBP$, $JPY$ and $USD$. They indicate a very complex or speculative behavior.