USD/BRL Analysis Today - 24/09: Fast Gaps Persist (Chart)
Date
9/24/2024 2:59:09 PM
(MENAFN- Daily Forex) The USD/BRL finished yesterday's trading back within the higher part of its near-term range, this as the currency pair continues to display a tendency to open the day's trading with large gaps.
The USD/BRL closed around the 5.5377 mark yesterday. The high on Monday actually touched the 5.6000 level briefly. The USD/BRL closed on Friday near the 5.5084 ratio, but opened yesterday's trading with a strong gap higher. The low for the USD/BRL last week occurred on Thursday's opening as traders reacted to last Wednesday's Federal Funds Rate cut, but also it must be said that after the U.S central bank acted, the Brazilian Central Bank actually increased their interest rate by 0.25%.
Hawkish policy from the Brazilian Central Bank has been known and this has caused a loud debate with the Workers Party of Brazil led by Lula da Silva. By the way, Lula da Silva will be speaking at the United Nations today, but his speech is unlikely to affect the USD/BRL significantly. The price action in the currency pair remains within the higher elements of its long-term realms.
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Yes the USD/BRL is still trading near highs, but the highest elements of the currency pair's value have seemingly run into headwinds recently. However, the ability to test the 5.6000 ratio briefly yesterday is a reminder that nervous sentiment certainly exists within financial institutions dealing with the Brazilian Real. Day traders also have to acknowledge that not only are gaps rather dangerous in the USD/BRL, but because the currency pair is not the most widely traded Forex pair that its bids and asks price when trading are wide when trying to enter a trade.
Day traders have to be careful with the USD/BRL and use entry price orders. The ability of the USD/BRL to maintain its higher price levels yesterday and trade in a sideways manner may be a signal financial institutions may believe the higher elements of recent trading realms will still be tested. Traders should watch the opening this morning in the USD/BRL to see which direction it opens and if another gap is displayed. Another gap higher would perhaps be a bullish signal regarding behavioral sentiment outlookWagering on the USD/BRL
Traders may be tempted to believe the USD/BRL has been overbought, but debate about fiscal policy and the socialist platform of the Workers Party in Brazil continues to cause tensions in financial institutions as they try to form an opinion regarding mid-term outlook.
The momentum upwards in the USD/BRL has run into some resistance recently, but yesterday's higher rush initially should be examined to see if it happens again today. The 5.5150 level in the USD/BRL may be of interest as a target for sellers, but if the currency pair moves higher today this may mean financial institutions have other ideas and a higher realms in mind for the currency pair.
Brazilian Real Short Term Outlook:
Current Resistance:
5.5400
Current Support:
5.5310
High Target: 5.5710
Low Target:
5.5140
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