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Consolidated Price near Lows and Support Intriguing

The USD/BRL is trading near lows not seen in two weeks, and yesterday’s ability to consolidate near these support levels may be attractive for speculators.

The USD/BRL ended its day near the 5.1955 ratios yesterday and the currency pair is testing values not demonstrated since the 10th of March. The ability of the USD/BRL to create a bearish trend and correlate to the broad markets while also providing a rather consolidated price range yesterday could prove attractive for traders in the near term. The USD/BRL is intriguingly trading near the value it occupied on the 3rd of February.


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On the 2nd of February, the USD/BRL was trading near the 4.9425 mark momentarily.  The technical and fundamental consideration of this price ratio is perhaps of interest to speculators because this low was one day before the global Forex market began to get nervous about the U.S. Federal Reserve becoming aggressive and USD strength suddenly emerging.

The USD/BRL went to nearly 5.3325 this past Friday when heightened concerns about the European and U.S. corporate banking sectors produced a rush into risk-averse assets. Selling of the USD/BRL yesterday underscored that financial institutions have found more tranquility over the weekend, and perhaps sets the tone for another calm day of trading. While speculators certainly need to monitor developing news, the current value of the USD/BRL and its ability to touch important support is alluring.

Traders as always need to be careful with the USD/BRL and the potential of a gap upon the opening of the currency pair today should be given merit. Trading volumes of the USD/BRL remain solid, but the Forex market can become thin at times within the currency pair. However, if global markets remain calm in the near-term and speculative sentiment leans towards an optimistic approach, there is a reason to believe the USD/BRL could produce more downside in the near term.

  • The 5.1000 to 5.2000 ratios of the USD/BRL have seen consistent trading in the past two months when selling has been strong. However, there is a risk bullish sentiment could reappear if the broad markets grow cautious again.
  • Day traders may want to wager on selling positions but should take into consideration that highs testing the 5.3000 mark have also been seen in the past two months.

The USD/BRL has delivered a rather interesting demonstration of value in the past two weeks while correlating to the broad Forex market. If risk sentiment is on the rise again in the near term, this may open the door for speculative selling positions to be wagered.

Current Resistance:  5.2075

Current Support:  5.1840

High Target: 5.2690

Low Target:  5.1260


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