USD/BRL Analysis Today - 01/10: Support Challenged (Chart)
Date
10/1/2024 2:48:43 PM
(MENAFN- Daily Forex) The USD/BRL has sustained the lower price levels it has challenged the past week and a half of trading, this as speculative consideration appears to be trying to correlate a more dovish U.S federal Reserve.
The USD/BRL finished yesterday's trading a breath away from the 5.4500 level. The currency pair has seen a rather significant challenge to lower prices develop since the 18th of September. The ability to flirt with the 5.4000 ratio the past week and a half of trading has certainly gotten the attention of day traders who have had to deal with a long-term bullish trend higher in the USD/BRL.
The potential that financial institutions are trying to calculate a more dovish U.S Federal Reserve into the USD/BRL is a healthy sign for the Brazilian Real. The currency pair has been hit by plenty of nervous sentiment this year due to public debates in Brazil between the ruling government and the Brazilian Central Bank regarding fiscal and monetary policies.
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After starting yesterday's trading with a move lower that again came within sight of the 5.4000 level, a reversal higher did occur, reminding day traders not to get overly ambitious regarding the USD/BRL. The ability of the currency pair to move lower remains debatable and there are reasons to suspect support levels may prove durable unless there is more economic data impetus from the U.S which moves the behavioral sentiment needle.
The move higher yesterday touched the 5.4700 level, but within a couple of hours the USD/BRL was again trading near the 5.4400 mark. Speculators need to consider the fact that there isn't a great deal of trading volume in the USD/BRL, entry price orders should be used to protect against large spreads via the bids and asks being offered by brokerage platforms. U.S economic data is being anticipated via the jobs numbers this coming Friday. The combination of the Non-Farm Employment Change data, and existing nervousness which remains in Brazil due to disagreement regarding government policy will continue to create potential choppiness Expectations in the USD/BRL
Traders should practice caution in the next couple of days. The always threatening capability of the USD/BRL to gap upon openings remains important. Traders may be able to read market sentiment per the direction of the openings today and tomorrow, but as yesterday's price action proved – support and resistance technically appears rather steady so reversals are also likely.
Choppiness is likely over the next couple of days as more impetus is awaited on via the U.S jobs numbers, if the reports are weaker than expected this could help the USD/BRL challenge the 4.4000 level and perhaps sustain lower marks. However, because questions remain regarding Brazil's fiscal direction, there is a likelihood moves lower will be met with buying from skeptical financial institutions.
Brazilian Real Short Term Outlook:
Current Resistance:
5.4530
Current Support:
5.4440
High Target: 5.4680
Low Target:
5.4280
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