Traders of the USD/BRL may be rather bored with the recent consolidation of the currency pair over the past few trading days. Yesterday’s USD/BRL price closed around the 4.8730 mark. On Wednesday of last week, the USD/BRL was trading near highs around the 4.9420 ratio when a steady stream of bearish momentum created swift price velocity. Since then consolidated trading has been exhibited with a slight incremental climb higher.
The lower move last Wednesday came after a high above 5.0000 was briefly tested on Friday the 18th of August. The USD/BRL has created a strong choppy reaction the past handful of days in trading, but it has sustained a lower price range which is testing support levels that have been demonstrated since the 3rd of August. From a one-month technical viewpoint, the USD/BRL remains within the middle of it price range.
USD/BRL Near-Term Consolidation will be put to the Test
While traders may be tempted to look for more downside price action in the USD/BRL, support levels look rather durable for the moment near the 4.8500 to 4.8400 ratios. Wagering on momentum to take the USD/BRL below these levels in the short term could be overly ambitious. The global financial markets remain rather fragile regarding behavioral sentiment and upcoming U.S. economic data will potentially add to this nervousness and new perspectives.
Important U.S Data will Have a Role in USD/BRL Trading Near-Term
- The U.S. will release the CB Consumer Sentiment numbers today and Gross Domestic Product statistics tomorrow.
- This coming Friday the Non-Farm Employment Change numbers and Average Hourly Earnings data will come from the U.S.
Traders should take into account following the U.S. jobs data this coming Friday, that financial institutions in the States will shutter for a long holiday weekend. Because this is essentially the last week of summer trading in the northern hemisphere, day traders need to understand traders have a tendency to be rather cautious. The consolidated track of the USD/BRL may remain choppy over the near term. Quick-hitting trades seeking nearby targets may be a good technique for speculators.
Behavioral sentiment has certainly produced nervous results which have created choppy conditions in Forex including the USD/BRL, and is a reason for the consolidated results of the past few days of trading as traders await more impetus. The results from the U.S. economic data this week will certainly affect attitudes, but a real shift in sentiment might not start to flourish until next week following the U.S. holiday when financial institutions start to possibly act on ‘new’ perceptions.
Brazilian Real Short-Term Outlook:
Current Resistance: 4.8850
Current Support: 4.8625
High Target: 4.9090
Low Target: 4.8450
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