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Lower Range Consolidated Trading Now Demonstrated


The USD/BRL has continued to incrementally trade lower the past handful of days, but short-term traders are being hit by consolidated results which are testing its range.

The price of the USD/BRL continues to show bearish sentiment and a low made this past Friday touched the 4.7585 ratio, which had last been seen in early June of 2022.  However, day traders looking for a wave of price velocity to jump aboard are likely finding rather choppy consolidated results. Traders may be frustrated unless they use very organized risk management tactics which include entry price, take profit, and stop-loss orders to engage in quick-hitting trades.

The USD/BLR has produced a consistent bearish trend over the mid-term.  For day traders to take advantage of this they should make sure they are not over-leveraged and also consider the potential of having to hold a position overnight. And now after attaining rather dynamic lows in the USD/BRL, some traders may start to feel contrarian and believe a sustained reversal needs to develop. But before traders decide to jump off of the lower bandwagon they should take a look at the results from the past six months of trading.

Support levels continue to prove vulnerable and the USD/BRL has sunk lower. Since falling below the 5.0000 mark at the start of this June, the USD/BRL has not only sustained its lower value but continued to produce bearish results. The U.S. Federal Reserve’s announcement that it would not raise interest rates last week confirmed the attitude of many financial houses and the USD/BRL dropped again.

  • Having broken below the 4.8000 ratios the past couple of days could prove to be significant, and today and tomorrow’s trading in the USD/BRL will be a good barometer of behavioral sentiment.
  • If the USD/BRL is able to maintain a value below the 4.8000 mark this could be another bearish signal.
  • Support between the 4.7600 to 4.7100 levels should be watched carefully, a test and penetration of the lower depth would be surprising. 

Traders should not get overly ambitious regarding the lower target of the USD/BRL. Traders should be willing to cash out profitable positions that come to fruition and be happy with the results. The USD/BRL doesn’t trade in a particularly fast manner and the volatility seen in a trading account is often because too much leverage is being used. In the U.S. today, Federal Reserve Chairman Jerome Powell will be speaking in front of Congress and this is sure to cause some reactions in Forex which could have an effect on the USD/BRL.

Current Resistance:  4.8020

Current Support:  4.7860

High Target: 4.8360

Low Target:  4.7610

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