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Progression Lower Touching June Values from 2022

The USD/BRL is now within a value range it has not touched since June of last year, this as the currency pair has demonstrated an ability to trade lower.

The incremental progression lower in the USD/BRL has been significant and the currency pair is also correlating to the broad Forex market.  The move lower since a high of 5.1300 was tested on the 31st of May has been steady, and the USD/BRL closed yesterday’s trading near the 4.8625 mark. Speculators who are participating in the USD/BRL today should be braced for a gap upon its opening, this is because the U.S. Federal Reserve will make its interest rate policy for June public today and financial houses are likely to try and position beforehand.

The rather steady move lower in the USD/BRL may be attractive to speculators, but they certainly need to be careful.  Behavioral sentiment has seemed to embrace the notion the U.S. Federal Reserve will not raise its interest rate today. If the Fed announces a halt to it Federal Funds Rate hikes today traders should understand this decision has been anticipated by global financial institutions.

The USD/BRL has seen selling the past two weeks like many other major currency pairs. If the U.S Federal Reserve were to surprise markets and announce an increase in the Federal Funds Rate today, the USD/BRL would likely see fast buying generate. However, a decision to pause hikes is the anticipated statement, and if there is a pause Forex markets will then move based on what the Federal Reserve says about its mid and long-term outlook regarding inflation and interest rates.

  • The lower movement of the USD/BRL means traders will have to look at the long-term chart for technical considerations.
  • If the USD/BRL were able to begin testing the 4.8200 value this could be important, but traders should not anticipate a fast move to happen without strong impetus.
  • Price velocity in the USD/BRL is rather slow sometimes, but the currency pair’s move lower the past two weeks has challenged support consistently and made price levels below look vulnerable and attractive. 

Traders who are betting on significantly lower USD/BRL movement will need to likely receive a rather dovish statement from the U.S. Federal Reserve today. However, the Fed is likely to be rather cautious, and say it remains concerned about inflation and may need to raise interest rates again in the mid-term if prices remain too stubborn. The movement of the USD/BRL has been lower in the past two weeks and long-term support is being tested. Traders should remain realistic and wager on quick-hitting targets. Choppy conditions will likely ensue before and after the Fed FOMC Statement today, speculators need to be careful and use risk management.

Current Resistance:  4.8760

Current Support:  4.8510

High Target: 4.8990

Low Target:  4.8120

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