The USD/BRL saw upwards price velocity develop late last week as financial institutions began to shutter for the long banking holiday which will last until tomorrow in Brazil.
The USD/BRL saw buying increase on Thursday and Friday of last week before financial institutions in Brazil closed for the long Carnival holiday. Banks in Brazil will mostly remain closed today, and the USD/BRL went into last weekend near the 5.8852 realm. Upon opening for trading tomorrow financial institutions will have to consider their nervous buying before going into the holiday, and decide if it too enough.
On Thursday of last week the USD/BRL essentially began to prove the 5.8000 level was acting as fairly reliable support levels. This after a climb higher became noticeable on Friday the 21st of February when the USD/BRL was hovering near the 5.7000 mark. The upwards mobility in the USD/BRL last week may have been based on the notion the currency pair had been oversold previously. However, financial institutions may have also been showing that they were nervous about possible repercussions which would have to be dealt with following their long banking holiday.
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Tomorrow’s Trading and USD/BRL Volatility
A lot has happened the past handful of days which has likely shaken the tranquility some traders felt about the USD/BRL. The Trump White House on Friday made it clear they will not tread softly when they have disagreements with nations. The public argument between President Trump and President Zelensky caused a reaction in all of Forex, and the USD/BRL was not immune to the volatility.
However financial institutions in Brazil may have also realized that the precedent regarding the exchange between the White House and the Ukraine could be seen in others places too. It is not a secret that President Trump doesn’t see eye to eye with Lula da Silva. Yesterday’s rather noisy reactions in the financial markets as the White House has gone ahead with some tariffs, will also have to be thought over as Brazilian financial institutions return to work tomorrow.
Higher Price Levels After Lower Values Were Seen
Day traders will have to be extremely cautious upon the opening of the USD/BRL when it takes place. Thursday’s trading will have had three days for large commercial USD/BRL traders to consider their outlooks. While some degree of caution may be the best attitude, speculators should not be surprised to see a gap upon the opening on Thursday.
- The current value of the USD/BRL is the monthly high, but the 5.9000 mark is within sight too, and the currency pair saw consistent trading above this level from late November until late January.
- Tomorrow’s trading in the USD/BRL will be a barometer test for the levels of nervousness which exists in global Forex too.
Brazilian Real Short Term Outlook:
Current Resistance: 5.8960
Current Support: 5.8780
High Target: 5.9270
Low Target: 5.8410
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