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New Lows Accomplished as Bearish Trend Builds Steam

The USD/BRL moved to new lows as yesterday’s trading concluded, and the currency pair is now within sight of bearish values not seen since June 2022.


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The USD/BRL continued to demonstrate the ability to traverse lower yesterday after U.S. economic data showed that inflation via the CPI numbers was weaker than anticipated.  The USD/BRL finished Wednesday’s trading near the 4.9180 ratios and the last time the currency pair saw sustained value around this mark was in the second week of June in 2022. Speculators who continue to have a bearish perspective of the USD/BRL may be feeling optimistic, particularly if they believe the U.S. Federal Reserve is going to have to also begin to change its monetary policy in the coming months.

Day traders of the USD/BRL should be aware that U.S Producer Price Index data will be published today and its inflation numbers will affect the currency pair.  Yesterday’s inflation results via the U.S Consumer Price Index were less than expected, if today’s reports indicate another decline in prices this would certainly make financial houses more bearish regarding their outlooks on the USD. However, not only are PPI results on the calendar today but tomorrow Retail Sales and Consumer Sentiment numbers will be published.

Day traders should be careful as they pursue the depths of the USD/BRL today because of the U.S. economic data risk events coming. Yes, lower-than-anticipated numbers would likely cause the USD to be weaker and may make the USD/BRL look attractive to sell further. The downward trend in the USD/BRL the past two weeks has been significant, particularly after a handful of rather choppy months of results in the currency pair.

Yesterday’s move below the 5.000 and ability to close near long-term lower values is intriguing. However even though the USD/BRL has attained a bearish trend, reversals higher still must be guarded against by day traders. If the USD/BRL can sustain values below the 5.0000 ratio this would be significant, but for this to happen U.S economic data today and tomorrow will also have to cooperate. If inflation and consumer statistics come in stronger than expected near-term, this could dampen behavioral sentiment and cause the USD/BRL to climb again.

  • Traders should be certain to use solid risk management if they are wagering on the USD/BRL.
  • The last time the USD/BRL traded below the 4.9000 ratio was in the first week of June 2022.

Day traders may want to wait for the U.S. PPI numbers to be released before they pursue the USD/BRL today. If the numbers are weaker than anticipated, the trend lower in the USD/BRL may appear attractive, but speculators are cautioned not to be overly ambitious. The trend lower is certainly interesting, but momentary reversals higher remain a concern

Current Resistance:  4.9460

Current Support:  4.9120

High Target: 4.9940

Low Target:  4.8790

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