USD/BRL: Slight erosion to 7 month downtrend, outlook neutralises – Commerzbank

Analysts at Commerzbank suggest that the USD/BRL’s outlook has neutralised following the demise of the 55 day moving average and the seven month resistance line.

Key Quotes

“The market has yet to CLOSE above the downtrend at 3.7826.”

“For now we will allow for a challenge of the 200 day ma at 3.8344, but in order to restore upside pressure we will need to see a close above here also. Support is offered by the 3.6373 January low. This guards the October low at 3.5859 and the November 2016 high at 3.5789.”

“While capped by the 200 day moving average at 3.8344 we maintain a bearish outlook. Resistance above the 200 day moving average comes in at the 3.8313/74 mid- to late December lows and key resistance at the 3.9436/54 November and December highs. Between these two areas lies minor resistance at the January high at 3.8973.”