The USD/BRL touched lows yesterday which had not been seen since the 9th of May, current support levels will likely stay in focus today for speculators.
- While USD weakness has become a theme in the broad Forex market the past few weeks, the USD/BRL has seen a choppy trend develop lower.
- Yesterday’s test of the 5.0900 ratio was important and although the level was proven durable the USD/BRL remains within sight of the mark.
- The currency pair closed yesterday’s trading near the 5.1043 mark.
When today’s trading in the USD/BRL opens, technical speculators will be watching to see if the lower values of the currency pair are sustained. If resistance remains durable around the 5.1080 to 5.1100 ratios, this could be a positive sign for more bearish activity to develop in the USD/BRL. The downwards momentum in the currency pair has been exhibited technically since the USD/BRL touched a high of nearly 5.2900 on the 16th and 17th of April. However, traders have not enjoyed a smooth trend lower; choppiness has certainly been a factor in the USD/BRL.
USD/BRL Trading and U.S Federal Reserve Outlook
Financial institutions have shifted towards a weaker USD outlook based on the belief the Federal Reserve will have to lower its interest rate potentially this late summer and maybe again in the fall. However, volatile conditions in the USD/BRL and the broad Forex market since the beginning of this year have been demonstrated for all to see. Speculators who want to bet on the USD/BRL continuing to see bearish selling should remain realistic regarding their price targets.
The U.S will not be releasing major economic data until Thursday and Friday of this week. FOMC members of the U.S Federal Reserve will be speaking today and tomorrow, but sentiment has certainly taken on more risk appetite in the global markets. The USD/BRL’s lower trend has correlated to the broad Forex market rather well the past few weeks. However, for the USD/BRL to continue downwards momentum, more impetus may be needed. Until U.S economic data is released later this week, existing behavioral sentiment could lead to rather choppy trading and test of the current price range.
Top Forex Brokers
Yesterday’s USD/BRL Lows and the Reversal Higher
The ability of the USD/BRL to touch its low water mark yesterday is intriguing. However it also highlights that the 5.1000 to 5.0900 levels may be seen as technically strong support in the meantime. Traders should keep their USD/BRL targets realistic and use take profit orders before reversals flourish.
- The potential that a test of yesterday’s lower depths could develop will prove interesting when the USD/BRL opens today for speculators.
- If the current short-term support levels falter, there is a potential financial institutions may aim for lower marks around the 5.0800 to 5.0600 ratios which were seen from the 3rd until the 8th of May.
Brazilian Real Short Term Outlook:
Current Resistance: 5.1080
Current Support: 5.1010
High Target: 5.1210
Low Target: 5.0860
Ready to trade our Forex daily forecast? We’ve shortlisted the best FX trading platform in the industry for you.