After producing a rather steady bearish trend since the middle of March until later June, the USD/BRL is now beginning to challenge higher prices once again. Speculators who were able to follow the downward trend within the Forex pair saw a low of about 4.89 on the 25th of June, but since then have witnessed an incremental move upwards. The USD/BRL will start trading today near the 5.26 vicinity with important resistance near the junctures of 5.2700 to 5.2800.
On the 8th of June, the USD/BRL briefly traded above the 5.3100 level and this likely set off plenty of alarm bells for speculators. A rather strong move lower was produced, but traders of the USD/BRL hopefully understand and expect choppy conditions to be prevalent within the Forex pair. As today’s trading gets ready to start, traders are likely pondering the ability of the USD/BRL to act ‘outside of the box’ and not always correlate to other major Forex pairs. Bullish speculators may decide to pursue the upwards trend technically.
The ability of the USD/BRL to remain rather bearish into late June did not correlate with the broad currency trading market. While other major currencies saw their values decline in many cases starting in June against the USD, the USD/BRL actually produced its low in late June and only then started to show signs of bullish momentum. This begs the question whether the USD/BRL still has a couple of weeks of upwards mobility to complete, or if it will begin to consolidate within its current value range.
Bearish speculators may believe the USD/BRL has climbed too high, but its current values place the Forex pair within the long-term range of its established price. The USD/BRL has a habit of exhibiting tranquil conditions in small price increments, so patience is needed. While spikes like last week certainly have the capability to transpire, they are not always common.
If the USD/BRL begins to test the 4.2800 to 4.3000 junctures, traders may feel inclined to sell the Forex pair and look for short-term, quick-hitting results. Speculators should not be overly greedy with the USD/BRL and be willing to cash out winning positions if they are accumulated, before they vanish in the blink of an eye. Bullish traders who want to simply continue to wager on more upside momentum until proven otherwise have a strong argument too.
Brazilian Real Short-Term Outlook:
Current Resistance: 5.2800
Current Support: 5.2350
High Target: 5.3300
Low Target: 5.2050
