The USD/BRL closed yesterday’s trading near the 5.3700 ratio and the lower sustained price action in the currency pair is traversing near values seen in late November 2025.
Bearish trajectory has taken hold in the USD/BRL again. Yesterday’s price action actually saw some buying produced after the 5.3500 vicinity was challenged. But the USD/BRL has rid itself of risk premium that was factored into the currency pair after weaker than expected GDP numbers from Brazil in December emerged. Also, full trading volumes have returned now that the holiday season is completed.
Top Regulated Brokers
The rather technical downwards trend accomplished in the USD/BRL into the end of November has been reasserted. Current value near the 5.3700 ratio is a low that financial institutions will recognize in Brazil and believe may be able to traverse lower. The USD/BRL showed significant support challenges from September into November with lows often coming within sight of the 5.2800 vicinity.
Reversals and Volatility in the USD/BRL
Even though the Brazilian Real is a relatively lightly traded currency pair, there has been speculative action and opportunities for traders to pursue the past handful of months. International news continues to be a threat to sentiment, so day traders need to keep their ears open for events that could trigger risk adverse conditions for the Brazilian Real. However, if cooler heads continue to be seen and experienced large players remain a factor, the USD/BRL at its current values may be seen as a potential place to look for lower price action.
The USD/BRL did see plenty of upside price action from the 4th of December into the holiday season, but it appears the 5.4000 realm has now become an important juncture. Traders may believe this level could act as resistance psychologically, but even this ratio may be deemed too high. Yet, there will be some important U.S inflation data today from the CPI. If the Consumer Price Index came in higher than expected this could cause some USD/BRL buying. Middle East news from Iran should be monitored too.
Lower Realms and Optimism Near-Term
Now that the holidays are complete and financial institutions have returned to the markets, sentiment has shown a tendency towards weaker USD centric price action in the USD/BRL.
- Traders should not get overly ambitious, but if the 5.38000 and 5.39000 ratios prove to be resistance levels that are durable in the short-term this could mean additional moves lower may be seen.
- The Brazilian Real reacts to domestic news regarding the Brazilian Central Bank quite frequently, but the central bank does a good job of being tranquil and letting financial institutions know what the interest rate outlook is regularly.
- If U.S CPI numbers meet or are weaker than anticipated today, and global financial markets remain calm, the USD/BRL a bit lower may be a logical wager.
Brazilian Real Short Term Outlook:
Current Resistance: 5.3780
Current Support: 5.3660
High Target: 5.3940
Low Target: 5.3410
Want to trade our daily forex analysis and predictions? Here are the best brokers in Brazil to check out.