USD/BRL: Slight Push Lower Before Additional Impetus Arrives

The U.S. will release GDP numbers later today and this could cause some reaction in Forex and might have impetus in the USD/BRL, but it will likely be short-lived.

The USD/BRL closed yesterday’s trading near the 4.8705 level yesterday which was above the lows made earlier on Tuesday when the currency pair touched the 4.8575 depth. The USD/BRL hit depths which had been seen one week ago, this before U.S financial institutions escaped for a long holiday weekend. The ability of the USD/BRL to once again come within sight of last week’s value shows the currency pair continues to lean towards selling momentum, but that support levels are also rather durable.

The USD/BRL has traded within a rather intriguing range over the past three months and support levels near the 4.8300 mark have proven consistently strong. A high in the USD/BRL was reached on the 6^th of October when the currency pair touched the 5.2200 mark briefly, and throughout October values remained mostly above 5.0000. The USD/BRL has correlated to the major currency pairs rather well. And now as it traverses within sight of what has proven to be rather stubborn support, speculators may feel enticed to sell – but they should be careful.

Six-Month Charts for the USD/BRL Important

Technically six-month charts may prove to be important for short and near-term traders who want to pursue lower depths in the USD/BRL. While support levels have proven difficult to penetrate below the 4.8300 mark, the currency pair did trade below the 4.8000 ratio periodically in late June and in July. However, traders looking for more downside price action in the short-term for the USD/BRL should stay realistic and aim for nearby support levels as take profits targets, this is because until the 4.8500 to 4.8300 ratios prove vulnerable they may continue to produce reversals.

The U.S. will release GDP numbers later today and this could cause some reaction in Forex and might have impetus in the USD/BRL, but it will likely be short-lived. Traders are actually gearing up for U.S Federal Reserve FOMC Meeting rhetoric in two weeks. If financial institutions continue to show a taste for risk appetite it could spur on additional USD weakness and opportunities to sell the USD/BRL for quick-hitting moves lower.

Tight Price Range and Speculative Wagers in the USD/BRL

Financial institutions may believe the USD/BRL is within solid equilibrium, this may mean the currency pair could produce choppy range-bound movement.
However, if risk appetite in the global markets remains strong, selling sentiment in the USD/BRL may prove speculatively attractive.
If resistance near the 4.8800 to 4.9000 remains solid, this could prove to be good territory for conservative traders to launch wagers on lower moves for the USD/BRL.