USD/BRL Analysis Today 08/10: Near-Term Trading Range -Chart

(MENAFN- Daily Forex)

• The USD/BLR stopped trading on Monday near the 4.4970 ratio.
• The finish of yesterday's USD/BRL speculation left the currency pair within the upper part of its near-term range and within sight of prices attained on Friday in the aftermath of the U.S jobs numbers release.
• On Friday the USD/BRL touched a value of nearly 5.5200 which tested ground last seen on the 23rd of September.

While the USD/BRL certainly was able to create some downwards momentum since the highs of late September, the past couple of weeks have also produced rather durable support near the 5.4000 vicinity. Intriguing also is the fact the USD/BRL was near the 5.4050 level last Wednesday when it started to incrementally climb. This move upwards started nearly two full days before the U.S jobs numbers report was published Institutions in Brazil Remain Skeptical

The ability to start climbing before the Non-Farm Employment Change numbers were released in the U.S shows that financial institutions were not willing to position for lower price velocity in the USD/BRL. The currency pair in fact touched the 5.5100 vicinity on Thursday before selling off, the low just before the U.S jobs numbers were reported were around the 5.4600 ratio.

The USD/BRL still remains correlated to the broad Forex market, but nervousness about fiscal policy in Brazil via the Workers Party led by Lula da Silva is obviously creating headwinds regarding any strong bearish movement. Yes, the USD/BRL certainly does have the capability to reverse lower, but mixed outlooks regarding what the U.S Fed will do next is likely creating some choppiness for the currency pair now/BRL and U.S Economic Data via Inflation Reports

Short-term speculators of the USD/BRL need to remain cautious. They should also know that Consumer Price Index data will be released from the U.S on Thursday which will affect the USD/BRL. If the currency pair remains within the higher elements of its near-term range this would signal financial institutions remain skittish. Choppy conditions should be expected the next two days in the USD/BRL.

• Traders will need plenty of risk management working before and after the release of the inflation reports on Thursday from the U.S because they will move the currency pair.
• The ability of the USD/BRL to maintain its higher price range yesterday may signal additional nervous buying will still be seen if technical support around the 5.4700 level comes into sight.
• Traders also need to remain aware of the large spread between bid and ask prices for the USD/BRL.

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Current Resistance:
5.5010

Current Support:
5.4720

High Target: 5.5220

Low Target:
5.4530

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