USD/BRL may fall 333 - 498 pips

Our pivot point is at 5.5926.

Our preference

The downside prevails as long as 5.5926 is resistance.

Alternative scenario

The upside breakout of 5.5926, would call for 5.6203 and 5.6368.

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 below its signal line and negative. The configuration is negative. Moreover, the price is trading under both its 20 and 50 period moving average (respectively at 5.5822 and 5.5842). Finally, the USD/BRL is trading below its lower Bollinger band (standing at 5.5768).

Supports and resistances

5.6368 **

5.6203 *

5.5926 **

5.5817

5.5708 last

5.5375

5.5210 **

5.5045 *

5.4881 **

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