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- USD/BRL drifts lower towards 5.51 and 5.44 supports – SocGen
USD/BRL drifts lower towards 5.51 and 5.44 supports – SocGen
USD/BRL has experienced an initial pullback after retesting April high of 5.75. Economists at Société Générale expect the Copom to hike the Selic rate by 100bps in the coming meeting. They note that the pair is edging lower towards 5.51.
A bounce towards 5.75/5.79 is not ruled out
“The consensus today for 150bp to 7.75%, that’s still a real rate of -255bp. We pencil in 100bp.”
“USD/BRL is drifting towards a steep up sloping trend line at 5.51 which is also the 38.2% retracement from August. This and recent trough at 5.44 are short-term support levels.”
“A bounce towards 5.75/5.79 is not ruled out with next hurdle at the peak achieved earlier this year at 5.88. This would be an important resistance.”
“Only if 5.44 breaks, there would be a risk of a deeper down move.”
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