The USD/BRL was able to come off of highs produced last week, as financial institutions saw their fear starting to subside as the U.S White House moderated its tariff stance.
The USD/BRL closed yesterday’s trading near the 5.8550 mark. The current value of the USD/BRL is in the middle of its six month range. The USD/BRL is also traversing nears values seen on the 7th of November. Financial institutions are clearly situated back to square one, in the immediate aftermath of the Trump election victory in the first week of November 2024, waiting for more clarity.
If a speculator of the USD/BRL had not looked at the markets or given attention to the news, they might be tempted to believe a calm trading range has been seen the past handful of months. Obviously that is not what has happened. Trading volatility the past two weeks delivered enough up and downs to teach new lessons to old experienced speculators. The past couple of days in the global markets have seen more calm, but USD/BRL traders should not relax too much.
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USD/BRL Known Prices and Waiting for More Direction
While the move lower in the USD/BRL has been sustained, intriguingly a lot of the selling in the USD/BRL took place on Thursday and Friday of last week. The USD/BRL was near the 5.9630 vicinity on Thursday when the currency pair began to sell. A low was touched on Friday near 5.8150, and then some buying was seen with a high near 5.9300 later in the day. However, yesterday’s trading after producing a gap lower to start the day, then climbed slightly, then started showing incremental selling again.
The USD/BRL is essentially in a known price range as financial institutions tread carefully based on the notion the U.S White House may have more rhetoric to deliver regarding tariffs. Thus far Brazil has stayed out of the limelight and not gotten the attention some other nations have received unfavorably. Except, it should be remembered Brazil trades plenty with China, and this may be casting a shadow regarding the outlook of financial institutions as they consider the USD/BRL and concerns.
USD/BRL Near-Term and Upcoming Holiday Trading
The Good Friday and Easter holidays are quickly approaching and this means financial institutions will be absent from the Forex marketplace in large measures the end of this week and early next. Volumes today, tomorrow and Thursday could provide dynamic results as Brazilian financial institutions brace for the long holiday weekend.
- Large traders may become risk adverse leading up to the holiday, this because they might not want to hold the USD/BRL over a long weekend.
- However, day traders may be tempted to look for downside in the short and near-term based on results from other emerging market currencies the past couple of days which have seen support levels prove vulnerable.
- USD/BRL speculators should be careful and practice good risk management.
Brazilian Real Short Term Outlook:
Current Resistance: 5.8590
Current Support: 5.8510
High Target: 5.8710
Low Target: 5.8350
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