USD/BRL may fall 371 - 556 pips

5.4675 is our pivot point.

Our preference

The downside prevails as long as 5.4675 is resistance.

Alternative scenario

The upside breakout of 5.4675, would call for 5.4986 and 5.5171.

Comment

The RSI is below 30. It could either mean that the pair is in a lasting downtrend or just oversold and therefore bound to retrace (look for bullish divergence in this case). The MACD is negative and below its signal line. The configuration is negative. Moreover, the price stands below its 20 and 50 period moving average (respectively at 5.4550 and 5.4697). Finally, the USD/BRL has penetrated its lower Bollinger band (5.4467).

Supports and resistances

5.5171 **

5.4986 *

5.4675 **

5.4552

5.4430 last

5.4059

5.3874 **

5.3689 *

5.3503 **

Number of asterisks represents the strength of support and resistance levels.