Speculators who want to wager on the USD/BRL via trading today will have plenty of technical considerations to make. The USD/BRL has proven its long term ability to open the day’s trading with vivid gaps, so speculators should monitor the start of the day. Yesterday’s closing price for the USD/BRL currency pair was near 5.1450, which essentially places price action near the upper realms of its five day chart.
However, even as the USD/BRL has accomplished a slight bullish run and been able to sustain the ‘highs’, the forex pair actually has shown ability to incrementally trade lower in the past month. The notion that the financial world is now within the dog days of summer in the northern hemisphere should be taken into consideration, because trends sometimes can prove to be illusions this time of year – meaning they are short lived. Yet, the USD/BRL has mirrored many other major currencies the past handful of weeks and shown some bearish tendencies.
Recent Move Higher may have some Staying Power, but it could also prove to be False
On the 3rd of August the USD/BRL was trading near the 5.31000 ratio. On the 21st of July the USD/BRL was near the 5.5200 mark. This decline in price for the USD/BRL currency pair has created a rather incremental pattern. Yes, reversals have been seen, but resistance levels have lowered for nearly a month.
- Resistance near the 5.1600 level should be watched near term, if this level proves strong and is not penetrated higher, additional selling of the USD/BRL could be sparked.
- Today’s opening should be watched closely, a move higher may make sellers nervous, but if price action is consolidated or a move lower occurs early this could be polite bearish signal.
Reversals are certain to occur in the USD/BRL as the Trading Range is Tested Short Term
The USD/BRL is likely to present traders with a solid speculative opportunity today. With near term resistance levels within sight near the 5.1600 to 5.1700 marks, traders will want to see if these ratios can prove durable. If the higher levels prove strong additional selling may occur on the notion the trend for the USD/BRL remains bearish.
A move above the higher relatively close resistance levels could set off volatility in the near term. However, the last time the USD/BRL traded above the 5.2000 level was on the 5th of August. If the USD/BRL opens with a slightly lower move, but remains above the 5.1400 mark this could entice bearish traders to aim for the 5.1350 to 5.1275 prices. Entry orders should be used with the USD/BRL and solid risk management is essential.
Brazilian Real Short-Term Outlook
Current Resistance: 5.1496
Current Support: 5.1342
High Target: 5.1639
Low Target: 5.1148
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex trading platforms to check out.