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USD/BRL Analysis: Higher Price Ream Holds and a Healthy Trading Sign

The USD/BRL has conducted an interesting week of trading for speculators and the near-term promises to be rather intriguing for potential wagers.

  • The USD/BRL finished trading near the 4.9515 mark yesterday.
  • The end of yesterday’s session puts the USD/BRL within sight of highs seen last week before a rather steep decline took place and the currency pair found its value close to the 4.9130 ration in the blink of an eye.
  • However while the upper range of the USD/BRL is again in sight, the result from the past handful of days shows that a health correlation with the broad Forex market is still being practiced.

USD/BRL Analysis Today - 30/01: USD/BRL Holds Steady (Graph)

The USD/BRL did come within eyeshot of the 5.0000 level on the 23rd of January. However, the USD/BRL has shown an inclination to stay away from this higher tier the past handful of days. Yesterday’s lows flirted with 4.9210 before climbing higher.

Short-Term USD/BRL and the U.S Federal Reserve

It appears the USD/BRL is trading in a manner that correlates to the USD centric outlook of global financial institutions. Tomorrow the U.S Federal Reserve will release its FOMC Statement. No change to the Federal Funds Rate is expected. If the Fed were to cut interest rates tomorrow it would be a major shock, it is NOT going to happen. What financial institutions want to hear tomorrow is the Fed’s monetary policy outlook in the mid-term.

The USD got weaker in the broad Forex market and within the USD/BRL in December; this upon behavioral sentiment shifting based on the notion the U.S Federal Reserve would turn dovish. However, it has become clear many institutions have felt the USD/BRL was oversold during this time. The move lower in the USD/BRL matched other major currency pairs, and its climb upwards the past handful of weeks – yes with plenty of fluctuations and reversals seen too – has fit into the broad Forex narrative.

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    Resistance near the 4.9550 to 4.9630 Ratios Important Short-Term

    Traders need to brace for tomorrow’s Fed announcements. In the short-term resistance near the 4.9550 to 4.9630 ratios may prove to be of interest to short-term traders today. If the USD/BRL is able to show resistance is durable in the wake of its opening today, this could mean selling sentiment continues to linger in financial institutions. Yet it is important to note that short-term and mid-term trading perspectives are acted upon differently by traders.

    • If the USD/BRL can open calmly and without a significant jump higher today, this may indicate selling will develop.
    • The trading range of the USD/BRL today is likely to be tight, but tomorrow’s price realm will widen.

    Brazilian Real Short Term Outlook:

    Current Resistance:  4.9570

    Current Support:  4.9485

    High Target: 4.9670

    Low Target:  4.9190

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    Robert Petrucci
    About Robert Petrucci
    Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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