The USD/BRL closed near the 4.8628 level on Monday. When trading opened yesterday a gap higher was demonstrated when the 4.8700 level and 4.8800 ratios were challenged, but as the day progressed some selling developed and the USD/BRL was again comfortably resting close to support levels which have been a consideration for traders over the past six months. On Friday the USD/BRL did touch a low of nearly 4.8300, but the 4.8100 ratio had been tested in the days after the Christmas holiday, showing lower values have been seen in the currency pair.
Speculators in the USD/BRL always have important considerations to acknowledge. The USD/BRL is a major currency pair, but remains a lightly traded Forex asset and its trading hours are limited for traders who want to pursue wagers. The opening trades for the USD/BRL are often plagued by gaps which can be tricky for day traders to deal with if they have kept overnight positions.
Speculators in the USD/BRL need to use entry price orders and look for quick hitting trades if they are trying to take advantage of price movements in the currency pair which can sometimes feel limited. The almost constant battle with support ratios when mid-term charts are looked at for the USD/BRL price, however, offers some clues regarding speculative leanings.
USD/BRL and Economic Data
Brazil’s economy is doing well compared to most South American countries. Its inflation rate remains rather tranquil and while growth numbers have been lackluster the nation appears economically calm. The leadership of President Lula da Silva has not created weakness for the Brazilian Real. The USD/BRL continues to largely correlate with other major currencies teamed against the USD.
The apparent constant battle of the USD/BRL near current support levels is intriguing. The 4.8600 to 4.8400 levels need to be constantly monitored. The USD/BRL has not traded below the 4.8000 ratio since early August. It appears that the USD/BRL has very durable support and some speculators may be inclined to use these support levels as a place to make short-term bullish wagers on the USD/BRL.
USD/BRL Speculative Bets and Risk Management
Traders looking for upside in the USD/BRL should not be too ambitious, quick hitting bets are the likely correct choice. The use of very conservative leverage is needed too.
Traders who want to use the 4.8600 to 4.8680 ratios as a place to ignite buying positions of the USD/BRL are betting on durable support perspectives, but these junctures can prove vulnerable too.
The U.S was on holiday yesterday and the return of U.S financial institutions today could cause some momentary volatility for the USD/BRL.
Brazilian Real Short Term Outlook:
Current Resistance: 4.8870
Current Support: 4.8610
High Target: 4.9070
Low Target: 4.8405
Ready to trade our daily Forex analysis? We’ve made this forex brokers list for you to check out.