Dollar Holds Its Ground as Uruguayan Peso’s Rally Pauses: Technicals Signal Caution

Official market data for July 11, 2025, shows the U.S. dollar trading at 40.416 Uruguayan pesos, unchanged from the previous close.

The dollar index edged higher overnight, reflecting steady demand for dollar assets. Currency desks note that the peso’s recent run of strength, which began on April 11 at 39.50 and peaked at 40.70, stalled on July 2.

Since then, the pair has moved sideways, with July 10 seeing a range from 40.60 to 40.40. This pause does not yet mark a reversal of the peso’s gradual strengthening. Technical indicators continue to point to a weak dollar.

The 50-day moving average crossed below the 200-day moving average on May 6, forming a “death cross” on the daily chart. Since then, the gap between these averages has widened, reinforcing the longer-term bearish outlook for the dollar against the peso.

The current price remains far below both the 50-day and 200-day moving averages and well beneath the Ichimoku cloud, underscoring persistent downward pressure. However, there are signs of short-term stabilization.

The price now sits above the 9-day and 29-day moving averages, a pattern not seen since April. This shift suggests some short-term support for the dollar, though it does not outweigh the dominant longer-term trend.

The Relative Strength Index (RSI) at 44.78 signals neither overbought nor oversold conditions, while the MACD histogram shows only a slight uptick, indicating weak bullish momentum.

Bollinger Bands have narrowed, reflecting lower volatility after the recent decline. The price trades near the middle band, signaling indecision among participants.

Support levels cluster at 40.20 and 40.07, with resistance at 40.77 and 41.14. The market respects these boundaries, and no clear breakout or breakdown has emerged.

Volume indicators confirm the lack of conviction. Flows remain steady but unspectacular, with no evidence of large institutional positioning. ETF inflows and outflows tied to Uruguayan assets remain muted, reflecting investor caution amid global uncertainty.

On the fundamental side, Uruguay’s economic growth continues to slow, with GDP expansion forecast at 2.1% for 2025. The central bank’s recent rate cut aims to support activity, but inflation remains above target at 5.4%.

Export performance, especially in pulp and agriculture, supports the external sector, but domestic demand stays weak. The dollar’s resilience stems from global macro dynamics.

The dollar index’s move higher reflects safe-haven demand as investors weigh U.S. fiscal policy and global trade developments. Uruguay’s peso, while stable, lacks strong drivers for appreciation or depreciation in the near term.

For now, the USD/UYU pair trades in a narrow range, with technical and fundamental factors in balance. Market participants remain attentive to any signals from the central bank or changes in global risk sentiment, awaiting fresh catalysts to break the stalemate.