Market Mindset LATAM

Support Levels:

25M – breakout zone and first pullback target.

22M–23M – MA zone for intermediate-term support.

Resistance Levels:

None — in price discovery.

Psychological resistance: 32M, 35M, etc.

The lack of structure above increases volatility risk.

MACD (Inferred)

MACD likely spiked vertically and is in extreme positive territory.

Momentum remains bullish, but divergence risks will rise if price continues without pause. Trend confirmation present, but overextension is building.

Some forecasts remain optimistic: one projection estimates GDP growth of ~5.5% in 2025. However, the International Monetary Fund (IMF) recently downgraded its outlook to ~4.5% growth for 2025.

Other independent analysts expect more modest expansion — reflecting ongoing structural challenges.

Medium-Term Outlook. According to the Organisation for Economic Co-operation and Development (OECD), real GDP growth may ease but remain positive: ~4.3% in 2026.

Inflation, Monetary Policy & Currency

Official data show annual inflation continuing to fall: as of late 2025, inflation was reported at 31.8%, the lowest in several years. Still, inflation remains high far above what many matured economies consider “stable.

Policy & Exchange Rate Regime. Under the current government, reforms include easing of many capital and currency controls, aiming to restore credibility and access to international capital. However, the need for foreign-exchange reserves remains acute.

Financial Stability Risks

Currency devaluation risk remains given past cycles of instability, many Argentinians still favor the dollar for savings, which complicates peso stability.

Fiscal Policy, Debt & External Financing

Fiscal Adjustment & Surplus Outlook

The government has made progress: some 2024 data showed a reduction in deficits and movement toward fiscal consolidation after years of fiscal stress.

Debt and External Obligations

One major challenge is Argentina’s external debt and foreign-currency obligations. Without building adequate reserves, exposure to global interest rates and rollover risks remains high.

The economy’s stability (inflation, FX, growth) will influence investor confidence and ability to access international capital markets.

Structural & Risk Factors. Rapid adjustment (inflation, austerity, currency shifts) may increase inequality, pressure real wages, and strain lower-income households. This social stress could lead to political pushback, complicating reforms.

Legacy of Instability & Trust Deficit

Argentina has a long history of defaults, hyperinflation, and currency crises. That legacy makes households and investors cautious; many still prefer holding hard currency rather than pesos. Council on Foreign Relations+2PIIE+2

Rebuilding trust through transparent policy, fiscal discipline, and reserve accumulation is critical for medium-term stability.

Vulnerability to External Shocks. Given reliance on commodity exports and foreign financing, Argentina remains exposed to global commodity cycles, interest rate shifts, and external demand.

Support Levels:

1,800,000 – critical support; breakdown could lead to capitulation.

Below that: 1,700,000–1,750,000 – psychological levels from earlier bases.

Resistance Levels:

2,100,000 – near-term resistance.

2,350,000 – high of last major rally.

Key Insight: If 1.8M breaks, panic selling could trigger — initiating Stage 14: Capitulation.

MACD

Based on structure, MACD is likely: Below the zero line

Possibly showing bearish histogram bars. Momentum is clearly negative.

Inflation, Monetary Policy & Currency

Inflation Progress. Monthly inflation has fallen below 2% for the first time since 2020.

Monetary Policy. The Central Bank maintains tight monetary conditions, with positive real interest rates and a managed float of the peso.

International reserves have started to rebuild, supporting peso stability.

GDP & Growth Outlook. Strong Recovery in 2025. GDP is expected to grow by ~5.5% in 2025, led by energy, agriculture, and recovering consumption.

Private Investment. Business confidence has risen significantly due to deregulation, infrastructure incentives, and reduced red tape.

2026 Outlook. Growth is expected to moderate to ~3.1% as base effects fade and reforms enter a consolidation phase

Fiscal Position & IMF Support. Argentina posted a fiscal surplus in H1 2025, driven by spending cuts and rising revenues from exports and consumption taxes.

Energy Boom & Vaca Muerta. Energy Self-Sufficiency in Sight

Argentina is expected to become a net energy exporter by early 2026, reducing pressure on its trade balance

Political Landscape & Risk. Midterm Elections – October 26, 2025

These will test President Javier Milei’s ability to maintain legislative backing for structural reforms.Local elections in Buenos Aires (Sept 7) show tight margins, indicating fragile political support.

Trade & Agriculture

Agricultural Exports Rebound The 2025/26 season projects 15–20% higher maize planting area.

Export Growth. Improved terms of trade, combined with stable FX, support a double-digit export growth in 2025.

Legal Risks & External Pressure. YPF Expropriation Case (U.S. Courts)

Argentina secured a delay in turning over its YPF shares after a U.S. appeals court granted a stay in August.

Support Levels:

2,000,000 – strong horizontal support and base structure.

2,150,000 – short-term support formed in early August.

Resistance Levels:

2,350,000 – recent high from the rebound.

2,500,000 – prior euphoric peak from January 2025.

Key Insight: Price is consolidating just below resistance. A breakout above 2,350,000 would confirm a bullish continuation.

MACD (Momentum Indicator)

• MACD line is positive, above the signal line since early July.
• Recently curved down, indicating slowing momentum, not reversal (yet).
• Still above the zero line → momentum is still bullish, but cautious.

MACD confirms the upward shift but highlights short-term consolidation. No bearish crossover yet. MACD flattening and turning back up would confirm a bullish momentum continuation.

Watch for bounce off the 50-day MA to confirm buyers defending the trend.

A breakout above 2,350,000 would signal a move into Stage 6 “Hope”, attracting more participants.

Macroeconomic Trends

• GDP Growth
  Argentina’s economy is on a rebound, with GDP projected to grow 5.5% in 2025, driven by strong private investment, consumption, and exports.
• Inflation Correction
  Inflation has dramatically declined from levels above 200% in late 2023 to around 45% year-on-year in mid‑2025. Core inflation also continues to ease.
• Improved Fiscal and External Conditions
  • The government has achieved a fiscal surplus, while inflation dropped from 25.5% (Dec 2023) to 2.4% monthly (Feb 2025), bringing down country risk spread significantly.
  • Inflation in May slowed to 1.5% month-on-month, marking a five-year low.
• IMF and International Financing
• IMF Arrangement & Disbursement
  Argentina has secured a $20 billion Extended Fund Facility with the IMF, of which a $2 billion disbursement is pending upon Board approval following a staff-level agreement.
• Capital Controls & Peso Policy
  As part of IMF conditions, Argentina eased most capital and currency controls. The peso now floats within a controlled band, and reserves are being rebuilt through export incentives, bond issuance, and repurchase agreements.
• Energy Sector Developments
• Vaca Muerta Expansion
  The Vaca Muerta shale formation continues to drive growth: Q1 2025 oil output rose 26% YoY, and natural gas output climbed 16%. Investments from firms like YPF, Shell, Eni, and Equinor are positioning Argentina closer to energy self-sufficiency and future LNG exports.
• Midterm Elections (October 26, 2025)
  Legislative midterms and provincial elections will shape Milei’s ability to implement reforms and influence investor confidence.
• Forecast for Public Sentiment
  A local Buenos Aires election on September 7 will serve as a key political barometer, with strong implications for confidence in economic policies.
• Policy Discourse & Investments
  At the August 21 Council of the Americas conference, officials will discuss the Régimen de Incentivo para Grandes Inversiones (RIGI) to attract foreign investments in sectors like energy and mining.
• Agricultural Cycle & Trade Outlook
• Agricultural Expansion
  The Rosario Stock Exchange projects a 15–20% increase in the maize sowing area for the 2025/26 season, reflecting strong crop conditions. Wheat output is also expected to hold steady at around 20 million tonnes.
• Legal and Sovereign Pressures
• YPF Stake Litigation
  Argentina avoided immediate loss of its 51% stake in YPF following a favorable U.S. appeals court ruling, allowing an appeal against a prior order to transfer shares in a dispute over expropriation compensation.
  
• Market Implications: Investor Sentiment: Hinges on election outcomes and continued reform momentum.
• Equities and Exporters: Energy and agricultural sectors could be major beneficiaries.

Bond and Currency Markets: Fiscal discipline and IMF backing support yields and peso stability.

Trend & Price Action

High risk of pullback or consolidation.

Support Levels:

1,350,000: Recent breakout level offering near-term support.

1,280,000: Key horizontal support from earlier consolidation.

Resistance Levels:

1,420,000: Current high, may act as short-term ceiling.

1,500,000: Psychological resistance if rally continues.

Trend Direction:

Sharp uptrend with signs of momentum exhaustion.

Market shows steep ascent, demanding caution.
Moving Averages

50-day MA: Steeply rising but trailing far behind current price — indicates overextension.

200-day MA: Rising steadily, confirming long-term bullish trend for now.
MACD

Histogram: Positive but flattening, suggesting waning momentum.

MACD line well above signal line, yet convergence may be developing.
RSI (Relative Strength Index)

MACD line well above signal line, yet convergence may be developing.
RSI (Relative Strength Index)

High risk of pullback or consolidation.

Monetary Policy & Inflation

• Inflation remains high, though decelerating modestly.
• Central Bank maintains tight policy to stabilize the peso.

1. Currency Pressure

• Ongoing pressure on the Argentine peso; devaluation risk remains.
• High real rates used to attract capital and reduce volatility.

1. IMF and External Debt

• Active negotiations with the IMF influence investor sentiment.
• Market watching debt restructuring and fiscal performance closely.

1. Political Risk

• Mid-term elections in Q4 2025 could shift policy direction.
• Tension between populist and reformist agendas is key.

1. Commodity Tailwinds

• Soybean and energy exports benefit from high global prices.
• Agricultural surplus supports fiscal and trade positions.

1. Capital Controls

Limits on repatriation and FX access remain structural concerns.

Continued tight capital controls pose risks for foreign investors.