The USD/BRL finished yesterday’s trading above the 5.5900 level, after another powerful leap upwards which saw the currency pair go from around 5.5385 starting the day to 5.5910 by its end.
Since touching the 5.3000 level on the 5th of December the USD/BRL has turned upwards. Yesterday’s buying took the USD/BRL up to the 5.5910 ratio by the close of trading. Intriguingly, the Brazilian Real has experienced two Monday’s in a row in which buying pressure has been seen after the weekends, possibly indicating financial institutions have considered their outlooks about the mid-term value of the USD/BRL and returned to their desks more nervous.
As the holiday season rapidly gets closer, day traders need to understand the USD/BRL is a lightly traded currency pair and that its volume today will grow thin, by tomorrow trading will be extremely light before shuttering for Christmas. However, financial institutions have shown signs that they are repositioning before the holiday season commences in order to be set for the New Year which is drawing closer.
Top Forex Brokers
5.6000 in Sight and July Values Considered
The USD/BRL which had demonstrated a robust bearish trend for a handful of months has reversed course. The currency pair is now within sight of 5.6000 and challenging ratios not seen since July of 2025. The USD/BRL touched the 5.6300 to 5.6500 vicinities in July and August of this year several times as worries about President Trump and potential ramifications of U.S tariffs were contemplated.
The reason for the moves higher in the USD/BRL now are because GDP data from Brazil has not been as strong as expected and the Brazilian Central Bank is expected to cut interest rates in January in order to try and bolster the economy. It does appear the USD/BRL is suffering from a change in behavioral sentiment which was optimistic about the Brazilian economy and has now become more cautious.
Holiday Speculation and Higher Values
Speculators who want to participate in the USD/BRL today may get a chance to see almost normal trading movement in the currency pair. Except they should be wary and be concerned by thinning volume, and the sudden ability of the USD/BRL to express unexpected surges in a marketplace in which orders could be unbalanced.
- The 5.6000 level above may be attractive for bullish opportunist who believe their mid-term technical charts suggest a challenge to July and August’s highs are legitimate.
- However, also because of the holiday season which is nearly here, day traders need to be very careful and understand the USD/BRL’s results today may produce surprises.
- The near-term trend upwards which has developed since the 5th of December may have additional room for new heights, but speculators should remain realistic and acknowledge the approaching Christmas holiday is a wildcard for today and tomorrow’s results.
Brazilian Real Short Term Outlook:
Current Resistance: 5.5980
Current Support: 5.5860
High Target: 5.6350
Low Target: 5.5630
Want to trade our daily forex analysis and predictions? Here are the best brokers in Brazil to check out.