The USD/BRL remains on the stronger side of its one-month range for the Brazilian Real and traders may be tempted to continue seeking selling positions. Short term traders who are experienced know values of forex pairs never move in only one direction, there is always an opposite side to a trade
The Brazilian Real has tested important resistance near the 5.0000 level a couple of times this week, but it has not been able to penetrate higher. Meaning that sellers remain active in the USD/BRL and there is reason to believe the stronger trend of the Brazilian Real may be the correct side of the trade. The short term has certainly given sellers of the USD/BRL reason to be nervous, but this depends on trading durations, take profit calculations and stop lose risk management.
The Brazilian Real is near its mid-March price levels, but it has not been able to punch through support around the 4.8000 juncture consistently. The support level of 4.8000 appears to be an important psychological level for the USD/BRL. Questions persists about Coronavirus and it management in Brazil, but these worries are consistent globally. The USD/BRL has seen plenty of selling the past month and the BRL is well off of its low value mark against the U.S Dollar when it was near 5.9500 in the middle of May.
Short term traders may continue to believe the trend of the Brazilian Real will be strong taking into account its performance the past month. With an important value of 5.0000 acting as resistance, traders will focus on this level and potentially use is as a selling juncture for the USD/BRL. The trading range for the Brazilian Real however may continue to be choppy, but the US Dollar has shown some weakness in forex today and this also may help the notion that a selling position of the USD/BRL short term is a responsible undertaking.
The Brazilian Real is an intriguing trade because of its rather tight range the past few days. Traders need to keep their eyes on the USD/BRL carefully, because consolidations of trading ranges in forex often deliver dynamic moves when an important support or resistance level is broken.
Brazilian Real Short Term Outlook:
Current Resistance: 5.0000
Current Support: 4.87000
High Target: 5.1000
Low Target: 4.4000
