The USD/BRL closed Monday’s trading near support levels which technically are challenging mid-April values, this as speculators have wagered on downside price action.
- The USD/BRL ended yesterday’s trading near the 5.1175 ratio. This price was essentially also the close of Friday’s trading value before going into the weekend.
- However it is noteworthy the USD/BRL was able to sustain its lower depths which have been accomplished.
- The USD/BRL went to a high of nearly 5.2910 on the 16th of April, but since then has fought its way lower.
- Last week’s trading in the USD/BRL began around the 5.2125 price and the currency pair did see some choppy trading, but since closing around the 5.1560 vicinity on Thursday selling pressure has been seen.
Yesterday’s start to trading saw only a slight gap, but the USD/BRL did move to a low around the 5.1025 mark before finishing the day with a test of the lower short-term range. Today’s trading in the currency pair could prove to be interesting for a couple of reasons that could combine to potentially create some speculative volatility. Tomorrow is Labor Day in Brazil which means financial institutions will be closed in the nation, but also on the horizon for Wednesday is the U.S Federal Reserve’s FOMC Statement.
Will the USD/BRL Test Support Levels in Anticipation
The notion that Brazilian trading institutions will be mostly shuttered tomorrow and the fact that the U.S Fed will be issuing their rhetoric too, could create some positioning today by large USD/BRL players before the storm hits tomorrow. If large traders of the USD/BRL try to position today they will likely be wagering on the notion the Fed is certainly not going to change its monetary policy tomorrow. What speculators betting on tomorrow’s Fed FOMC Statement do not know however, is the tone the U.S central bank will express.
The recent downward ability of the USD/BRL does correlate to the broad Forex market, selling of the USD has been seen. Yet in early trading this morning some cautiousness has developed and plenty of sideways price action has been seen globally. This opens the door to the prospect that even though there will be some speculators who are wagering on direction before the Fed’s pronouncements tomorrow, that USD/BRL may remain cautious today and traders may simply wait to return to their offices on Thursday before reacting.
Short-Term Wagers and USD/BRL Bearish Sentiment
- Traders looking for more downside in the USD/BRL cannot be blamed, but this could also prove to be too ambitious.
- Conservative trading in the currency pair might create sideways price action today which simply tests short-term technical perspectives
Brazilian Real Short Term Outlook:
Current Resistance: 5.1220
Current Support: 5.1110
High Target: 5.1340
Low Target: 5.0920
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