USD/BRL Analysis Today - 10/09: Price Stability (Chart)

(MENAFN- Daily Forex) Currency traders of the USD/BRL who have adjusted to the higher prices may be starting to feel acclimated to the technical realm that are being offered to wager upon.

• The USD/BRL closed yesterday's trading near the 5.5833 mark.
• A low on Friday was seen within the currency pair near the 5.5274 ratio before a bounce higher happened.
• The low seen last Friday only touched prices that had last been seen on the 28th of August.
• The USD/BRL is not trading within a directly correlated manner to the broad Forex market.
• Although the sudden lows clearly came about because of weaker U.S jobs numbers.

However, while the USD/BRL has certainly established a higher price realm the past nine months, trading the past few months technically is beginning to look like a support and resistance price band is forming. In late December of 2023 the USD/BRL was trading near the 4.7760, since then a clear bullish path has been highlighted with nervous buying of the currency pair.

Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Political Concern in Brazil and U.S Economic Data

The USD/BRL touched a high of nearly 5.7500 on the 1st of August, yes, the higher marks were seen briefly on the 5th of August – but this occurred when a momentary global financial panic created an over reactive marketplace. The ability to touch a high in early August and maintain technically resistance levels which look solid around the 5.6900 mark may prove to be significant. Nervousness about the tug of war between the Brazilian Central Bank and Lula da Silva's Workers Party continue to create concerns in financial institutions.

Yet, working on the assumption (and being optimistic) that financial institutions have shown the limits of their nervousness, the current established resistance levels may prove an interesting spot to attempt quick hitting wagers looking for lower ground. However, support levels are also proving durable and the 5.5000 to 5.4600 prices do look like they may be hard to penetrate lower for the moment. Tomorrow's U.S inflation data via the CPI reports will be of interest, because if the numbers come in weaker than anticipated it could spur on USD centric selling in the broad Forex market. But again, the lack of a correlation to U.S economic data and the USD/BRL over the past handful of months has been troubling and Risk Management in the USD/BRL

Traders intent on betting with the USD/BRL need to remain vigilant. Political winds in Brazil can spark a storm in financial institutions quickly. While the USD/BRL may look overbought the sustained higher price realm suggests that speculators should technically look for quick hitting bets. Additional impetus may happen in the USD/BRL.

• If it becomes clear the U.S Fed will suddenly cut interest rates more aggressively than presumed, the USD/BRL could reflect some of this sentiment, but there are no guarantees of the U.S Fed becoming strongly dovish quite yet.
• The U.S inflation report tomorrow could spark volatility in the USD/BRL.

Brazilian Real Short Term Outlook:

Current Resistance:
5.5910

Current Support:
5.5770

High Target: 5.6350

Low Target:
5.5590

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