Since early June, the USD/BRL has produced a rather solid bearish trend. The USD/BRL essentially began trading on the 1st of June near the 5.2100 price. As of this morning the Forex pair is near the 4.9550 ratio. Yesterday’s trading finished with a slight rise in value, but the move was rather insignificant.
Intriguingly, while the USD/BRL has been able to sustain its bearish trend, the majority of forex trading consisting with the major currencies teamed against the USD have not enjoyed the same trend. Since the beginning of June, the USD has actually gained against many of the major currencies. The USD/BRL is once again proving it is an outlier and traders need to take this into consideration.
Speculators of the USD/BRL have also had to deal with extremely consolidated prices the past week. This highlights the need to have limit, take-profit and stop loss orders working to take advantage of the Forex pair with short term trades. If a trader is able to keep the USD/BRL position open for a longer amount of time that could produce quite worthwhile results, but traders should make sure they understand the amount of carrying charges they might have to pay for overnight positions.
Resistance near the 4.9700 juncture appears to be strong, but this level should be monitored closely today, particularly because the USD has been relatively strong in Forex against other major currencies recently. Perhaps the USD/BRL will continue to traverse its own correlated path, but if nearby resistance levels are tested and proven vulnerable traders may naturally believe the 4.9900 to 5.0000 junctures could become targets for buyers.
Yes, the mid-term bearish trend in the USD/BRL has been significant and its ability to maintain this trajectory is important. The USD/BRL remains an extremely curious Forex pair because of its trading the past year due to coronavirus implications, and the frequent ability of the Brazilian real to demonstrate an ability to not correlate with the majority of major Forex pairs for long durations. If a trader wants to sell the USD/BRL at its current levels, short term ambitions and goals should be the focus. The consolidated range of the USD/BRL could cause nervousness, because if and when volatility strikes it may prove rather defiant.
Brazilian Real Short-Term Outlook:
Current Resistance: 4.9670
Current Support: 4.9400
High Target: 4.9980
Low Target: 4.9160
