USD/BRL may fall 371 - 557 pips

5.4780 is our pivot point.

Our preference

Under pressure below 5.4780.

Alternative scenario

The upside breakout of 5.4780, would call for 5.5092 and 5.5278.

Comment

The RSI is trading below 30. This could mean that either the pair is in a lasting downtrend or just oversold and that therefore a rebound could shape (look for bullish divergence in this case). The MACD is positive and below its signal line. The MACD must penetrate its zero line to expect further downside. Moreover, the price is trading under both its 20 and 50 period moving average (respectively at 5.4684 and 5.4610). Finally, the USD/BRL has penetrated its lower Bollinger band (5.4613).

Supports and resistances

5.5278 **

5.5092 *

5.4780 **

5.4658

5.4535 last

5.4164

5.3978 **

5.3792 *

5.3606 **

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