Colombian Peso Faces Key Test as Dollar Rebounds from Recent Lows
Official exchange rate data and technical charts confirm a clear shift in the Colombian peso’s trajectory since May 29, 2025.
After a period of sustained strength that pushed the peso to its highest levels since mid-March, the currency has reversed course and started to weaken against the US dollar.
The USD/COP now sits directly at its 50-day moving average for the second consecutive day, a critical technical juncture that traders are watching closely. From late April through May 28, the Colombian peso steadily gained ground.
The official rate closed at 4,128.15 COP per USD on May 28, with intraday trading even touching 4,108.5. This move broke through the long-standing 4,110 support level, surprising traders and marking a decisive shift in market sentiment.
Technical indicators at the time, including a 14-day RSI near 38, signaled the peso was approaching oversold territory, often a precursor to a reversal.
That reversal materialized on May 29. Since then, the peso has weakened each session, with the USD/COP pair rising and now challenging the 50-day moving average.
The current price action shows the pair consolidating just below resistance, with the 50-day SMA acting as a pivot. If the dollar breaks above this level, traders expect further weakness in the peso, potentially opening the way to test higher resistance levels.
Conversely, if the peso holds the line and the dollar fails to break out, renewed strength could emerge, pushing the pair back toward recent lows.
Fundamental factors remain mixed. Colombia’s annual inflation slowed to 5.41% in late 2024, and the central bank maintains a benchmark rate of 9.25%, offering a yield advantage over US rates.
However, the prospect of further rate cuts and ongoing political uncertainty, including a recent finance minister resignation, have tempered investor enthusiasm.
Oil prices, a key support for the peso, remain stable above $62 per barrel, but any shift in global demand could quickly alter the outlook. Technical analysis underscores the market’s indecision.
The USD/COP remains below its 200-day moving average, confirming a longer-term bearish trend for the dollar. The 14-day RSI has moved off oversold levels, now sitting in neutral territory, while Bollinger Bands have narrowed, reflecting reduced volatility and a market waiting for direction.
The story behind the numbers is one of a market at a crossroads. The Colombian peso’s recent weakness has brought it to a technical inflection point. Traders and investors now look to see whether the dollar can break above the 50-day moving average, which would likely trigger further peso losses.
If resistance holds, however, it could set the stage for the peso to regain its footing. The next sessions will prove decisive, as both fundamental and technical signals converge on this key level.
More: Colombia news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
In depth