USD/BRL Forecast Today - 14/05: Support Underneath (Chart)
Date
5/18/2024 1:49:17 AM
(MENAFN- Daily Forex)
The US dollar initially fell a bit during the early hours on Monday against the Brazilian real, but ultimately looks as if it is very well supported underneath. We have been in an uptrend for some time, and of course with the world on edge when it comes to so many moving parts, I believe at this point in time we are going to have to favor the greenback, despite the fact that the interest rate differential is fairly wide.
In fact, the Brazilian interest rate is 10.75%, much higher than the US interest rate. However, there are a lot of concerns when it comes to global politics right now, and of course the Brazilian economy itself is suffering. As long as that's going to be the case, it makes more sense that the US dollar rises, if for no other reason than to rush toward safety. Traders are not very strong with the risk appetite at the moment, at least not worldwide, but there are pockets of risk-taking out there. As things stand right now, South America is not part of that.
Top Forex Brokers
1 Get Started 74% of retail CFD accounts lose money
Technical Analysis
The USD/BRL pair continues to look very bullish, and you can even make an argument that we have formed some kind of really ugly bullish flag recently. The 5.10 level underneath seems to be an area of focus, as it has seen a gap a couple of times in the past in this region. The 50-Day EMA is also sitting near the 5.09 level and is rising so that could offer a significant amount of support. In general, I think this is a market that continues to see buyers and could go looking toward the recent high near the 5.29 BRL level. This is an area that I think would attract a lot of attention, mainly due to the fact that we have the 5.30 BRL level just above, and that of course could offer a certain amount of psychological resistance .
This pair more likely than not will remain“buy on the dips”, as traders continue to flood toward the higher interest rates offered in the United States and the relative safety. Furthermore, the US economy is most certainly performing better than many others right now, so that also has inflows into America.
Ready to trade our
Forex daily forecast ? We've shortlisted
the best currency trading platforms
in the industry for you.
MENAFN18052024000131011023ID1108228571
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.