The USD/BRL finished yesterday’s trading slightly above the 5.5700 ratio, as holiday trading hits what is historically a low volume currency pair to begin with as speculators look for opportunities, but likely struggle to find any.
Quiet conditions have taken over the USD/BRL and day traders looking to take advantage of perceived technical perspectives might want to second guess themselves. The USD/BRL finished yesterday’s trading near the 5.5700 ratio as it hovers near important resistance levels. However a lack of volume in the USD/BRL and danger of a large order suddenly coming into the Forex sphere should make all speculators with limited resources very cautious.
The USD/BRL is actually below its highs from last week, but again the currency pair is lingering near highs and financial institutions seem to be in a holiday slumber. What the USD/BRL will do when it sees normal volume is a good question, but that is unlikely to happen today and certainly not tomorrow before the New Year’s Day celebrations start.
Looking Ahead and Speculative Outlooks
Light holiday trading will persists this week and into early next. USD/BRL traders who see an opportunity for upwards momentum may be correct, but at some point large financial institutions who have a memory of lower values in the currency pair not so long ago, may begin to push back. Outlook via the U.S Federal Reserve remains mixed regarding what it will do with interest rates in the mid-term. The Fed will release its FOMC Meeting Minutes report today, but will anyone really be paying attention?
Nervous behavioral sentiment has certainly caused the Brazilian Real to lose value since the first week in December when it was hovering a little below 5.3000. And that is an important point, while the lackluster GDP numbers from Brazil may have shifted sentiment, when the Central Bank of Brazil starts to decrease its own interest rates as expected this might cause some reversals of attitudes – outlook.
5.6000 Level and Targeting
Limited trading volume makes the USD/BRL dangerous to take a position on today and tomorrow. Quick hitting notions will have to deal with the potential of a Forex market that languishes and looks asleep today and tomorrow before closing.
- The USD/BRL is near the 5.6000 level and this may seem like a logical target to some ambitious traders, but it may prove a step too far.
- The opening of the USD/BRL may provide a gap that alters short-term outlooks fast.
- The question is if current higher realms now being touched are perceived as being overbought by financial institutions.
- Even if they are – will big players want to position themselves in holiday markets or wait until full volumes return?
Brazilian Real Short Term Outlook:
Current Resistance: 5.5770
Current Support: 5.5660
High Target: 5.5980
Low Target: 5.5450
Want to trade our daily forex analysis and predictions? Here are the best brokers in Brazil to check out.