The USD/BRL closed yesterday’s trading around the 5.2729 mark as the currency pair has continued to produce a rather incremental bearish trend since being near 5.4100 on the 4th of November.
The USD/BRL continues to produce a rather solid incremental decline in recent trading, and closed yesterday’s Forex session around the 5.2729 mark. The currency pair also produced a gap lower when opening its trading this Monday and has not shown a substantial reversal higher, which may indicate financial institutions are comfortable with their outlooks and current price levels.
Yesterday’s trading in the USD/BRL did test the 5.2650 vicinity below, but support levels technically seemed to produce headwinds. A belief the U.S government shutdown may be coming to an end has likely added some risk appetite to Forex and allowed the USD/BRL a bit more impetus to the downside. However, the U.S House of Representatives will be voting on the shutdown later today and this will definitely cause volatility for the USD/BRL as sentiment shifts in global markets.
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USD/BRL Solid Bearish Trend and Lower Depths
The USD/BRL has produced a solid long-term bearish trend since stampeding upwards and beyond the 6.0000 ratio in December 2024. During the past eleven months in the wake of President Trump being in power, risk premium has been incrementally discounted. The ability of the USD/BRL to now traverse within values last seen in a sustained manner in June of 2024 is significant.
Certainly there remains a risk that President Trump could cause problems economically for Brazil with tariffs, but the USD/BRL has run the gauntlet of troubles via rhetoric and trade negotiations with the Trump White House and seems to be producing positive results. While Lula da Silva’s liberal government has the realms of power, Brazil’s Central Bank is being led with a conservative approach and this appears to be keeping financial institutions calm regarding the Brazilian Real.
Looking for Lower Technical Realms in the USD/BRL
Day traders as always need to remember intraday reversals always are taking place, the USD/BRL even as it displays an incremental downward trend still moves higher too. Speculators have gaps to worry about upon the opening of the USD/BRL on a daily basis and now have to consider where support levels will start to prove durable.
- Also, price velocity lower is likely not going to produce wildly fast downwards movement considering strong technical moves lower have already been seen.
- Long-term charts looked upon do show the USD/BRL traded lower in 2024.
- Can the USD/BRL start to challenge the 5.2500 to 5.2000 ratios?
- Short-term volatility will be seen later today as the U.S Congress votes on the government shutdown that is still in effect.
- If the U.S government spending bill is passed and opens the doors for the government to function fully again, this may activate some risk appetite in financial markets.
- Meaning the USD/BRL could see some movement lower today, but risk management will be needed for all wagers because choppy conditions are likely.
- If the spending bill is not passed in the U.S, this could cause a negative reaction and upwards traction.
Brazilian Real Short Term Outlook:
Current Resistance: 5.2800
Current Support: 5.3380
High Target: 5.2690
Low Target: 5.2320
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