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Chilean Nominal Exchange Rate: Forecasting Based Upon Technical Analysis

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Listed:
  • Ana María Abarca
  • Felipe Alarcón
  • Pablo Pincheira
  • Jorge Selaive

Abstract

This work presents a review of the main indicators used in the technical analysis of the peso-dollar parity. We explain the interpretations carried out by technical analysts of these indicators and perform forecasting analysis of the Relative Strength Index (RSI) to predict exchange rate returns at daily frequency. The predictive exercises are done using both in-sample and out-of-sample techniques, and report a robust forecasting ability for horizons within 7 weeks.

Suggested Citation

  • Ana María Abarca & Felipe Alarcón & Pablo Pincheira & Jorge Selaive, 2007. "Chilean Nominal Exchange Rate: Forecasting Based Upon Technical Analysis," Working Papers Central Bank of Chile 425, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:425
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    References listed on IDEAS

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