Jan 01, 2025 (MENAFN via COMTEX) --
(MENAFN - Daily Forex) The USD/BRL finds itself trading within the higher realms of its long-term price range, this as holiday trading has created some calm and allowed financial houses to put off their worries until next week.
The USD/BRL remains with the upper limits of its price range and closed yesterday's trading near 6.1778. The price of the currency pair is still challenging all-time highs, but the holiday season has seemingly put higher challenges on hold for the moment.
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Nervous sentiment regarding the Brazilian Real has not disappeared, it has merely been allowed to rest during this holiday season. This has allowed the USD/BRL the capability to see a slight decrease in quoted values, but it doesn't mean a sustained downturn is about to happen suddenly.
Tomorrow's coming New Year's Day celebrations will allow for another day of rest among nervous financial institutions which are not about to change their opinions about fiscal concerns regarding the current Brazilian government. However, trading volumes will only significant increase early next week and this is when the next wave of upwards attacks could take place in the USD/BRL Reversals Lower in The USD/BRL
Some traders may believe the USD/BRL is overbought within its current price range, but the past ten months of results in the currency pair shows an incremental thrust upwards. Impetus which is going to allow for the USD/BRL to suddenly display a downwards motion in a sustained manner is not about to be delivered in the coming weeks. Nervous behavioral sentiment will continue to be seen. Betting against the bullish trend in the USD/BRL remains only a game for speculators who are seeking quick hitting reversals and using take profit target orders below.
The ability of the USD/BRL to stay within sight of the 6.2000 value is a warning sign. Volumes in the USD/BRL will be very low today. Trading this coming Thursday and Friday will see increased transactions, but the transactions should be rather muted. However, if the USD/BRL sees upwards momentum take hold later this week, this will open the door to more nervousness when global financial institutions return in mass next week and begin to think about their cash forward positions and exposure to the Brazilian Real Levels are Vulnerable in the USD/BRL
Technical traders who are looking at long-term
charts may believe psychologically the USD/BRL has reached the upper limits of its potential. However, the bullish trend is not happening in a vacuum.
The results of the USD/BRL climb are a combination of growing unease regarding the fiscal policies of Lula da Silva and his Workers Party, and concerns that a strong USD centric buying stance may be sustained. Looking for continued incremental moves higher in the USD/BRL seems like the logical move by traders with the capability to be patient and practicing solid risk taking strategies.
Brazilian Real Short Term Outlook:
Current Resistance: 6.1850
Current Support: 6.1710
High Target: 6.2030
Low Target: 6.1620
EURUSD Chart by TradingView
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COMTEX_461425555/2604/2025-01-01T01:54:55
