USD/BRL: Failure to overcome 4.95/5.01 could lead to continuation in the downtrend – SocGen

Economists at Société Générale analyze USD/BRL technical outlook.

Below 4.69; next potential support is at 4.61/4.59

USD/BRL broke through the lower limit of a multi-month range near 5.01 resulting in a steady decline. It has recently tested the lower band of a descending channel at 4.69. 

An initial bounce is under way and revisit of 50-DMA near 4.86 can’t be ruled out. Lower limit of previous consolidation at 4.95/5.01 is an important resistance zone near term. Failure to overcome this could lead to continuation in the downtrend. 

Below 4.69; next potential support is at last year's low of 4.61/4.59.