Bullish reversal resists bearish trading sentiment
The USD / BRL has once again proven that it refuses to remain correlated to other major Forex pairs as a bullish reversal has set in.
Since reaching a low tide of nearly 5.1900 on the 7e from May, the USD / BRL has always proven that the support remains durable and, in fact, showed a tendency to gradually increase. The USD / BRL has again proven that it is often resistant to major correlations in global Forex. But before traders give us their bearish outlook that they may have been testing since the end of March, they need to come to terms with the idea that USD / BRL remains a speculative opportunity due to its tendency to deliver mind-blowing results.
The USD / BRL has seen an increase in its short term resistance levels, but the value changes within the Forex pair actually remain polite. The 18e In May, USD / BRL was trading near the 5.2200 junction and was certainly in sight of significant support levels, but the higher rebound finally allowed the 5.3200 junction to be tested the next day. Before heading into the weekend, the USD / BRL crossed a little lower early Friday to hover around the 5.2600 ratio, before ending the day near 5.3600.
USD / BRL remains a speculative currency pair for traders who have strong risk-taking management skills. As the USD / BRL prepares to open for this week of trading, it is certainly near intriguing resistance levels, but the question is whether they can prove durable. The last time the USD / BRL sincerely traded above its current values was on the 5the of May, and this happened after the Forex pair peaked near 5.4800 the previous day.
While the bullish momentum since the end of the first week of May seemed like the flavor of choice for the USD / BRL, it actually produced a lot of choppy trading both ways. This can give a boost to short-term USD / BRL traders who stubbornly want to pursue the potential of bearish price action to raise their tentacles and prove that the Forex pair has the ability to cross lower again.
Selling USD / BRL even though it has shown a legitimate short-term uptrend may actually be the best speculative bet. Cautious traders may want to see further upward movement before attempting to sell USD / BRL. However, if resistance levels near the 5.3750-5.3950 crosses seem to demonstrate adequate bracing, further downward reversals could potentially pay off in USD / BRL.
Short-term outlook for the Brazilian real:
Current Resistance: 5.3950
Current support: 5.3140
High Goal: 5.4400
Low target: 5.2650