Traders looking at technical charts of the USD/BRL via a one week interval may feel the rather steady values reflected in the currency pair could deliver an opportunity for interesting short-term wagers, which test support and resistance levels. However before jumping into the USD/BRL a couple of things should be acknowledged by speculators who want to gamble on the currency pair.
The USD/BRL finished trading near the 4.9000 mark yesterday. The high on Tuesday for the USD/BRL was around the 4.9082 mark, the high for the USD/BRL on Friday was about 4.9125. A gap lower on Monday morning when the USD/BRL opened produced a depth for the currency pair within the vicinity of 4.8430 a bit later in the day, which also happens to be close to the low of 4.8340 which was seen on Thursday of last week.
The Tight Range of the USD/BRL may Not Last Near-Term
The USD/BRL is a major currency pair, but one that is still not highly traded, and its volumes can be rather inconsistent which leads to gaps upon opening on many days. Added to this knowledge is the consideration the U.S Thanksgiving holiday will be celebrated tomorrow. However, many U.S financial institutions will begin to allow their employees to leave early today, meaning already thin volumes in the USD/BRL could become more shallow and that tomorrow’s trading will be extremely light.
Traders should understand if they are going to pursue the USD/BRL via support and resistance levels which have appeared tight the past week, that light volumes may allow for sudden volatile spikes that have little in the way of logic – except for the consideration that the currency pair had an order that was unbalanced and caused momentary value disruptions to occur.
One Month USD/BRL versus One Week Technical Viewpoint
When traders consider the one-week trading results in the USD/BRL compared to a one-month technical chart, they will see the currency pair is now within the lower part of its value range. This could open the door for consideration of selling the USD/BRL when resistance levels are touched. While this may prove to be a worthwhile wager, traders need to understand the lighter-than-normal transaction volumes within the currency pair will make the use of solid risk management essential for the remainder of the week because sudden spikes could develop quickly.
- The 4.9100 resistance level appears rather durable via a one week chart.
- Traders should watch the opening of the USD/BRL carefully today to see if this mark proves strong.
- Traders looking for downside in the USD/BRL should stay realistic regarding their goals, aiming for the 4.8800 to 4.8675 support levels as potential quick take profit targets may be intriguing.
Brazilian Real Short-Term Outlook:
Current Resistance: 4.9040
Current Support: 4.8820
High Target: 4.9135
Low Target: 4.8610
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