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5.00 Level Continues To Hold For USDBRL

BRAZIL
  • USDBRL trades with a more volatile tone on Wednesday, already taking out both extremes of the prior day’s range. Initial strength, alongside regional pairs and broader EM FX weakness, saw USDBRL rise once again to within close proximity of the notable 5.00 level, touching a high of 4.9942. The subsequent price action has seen the pair edge briefly back below to 4.96, but the pair has yet to bridge the gap with Monday’s close at 4.9380.
  • The release of the above-estimate US ISM Services index has provided some fresh impetus for the greenback and is supporting USDBRL in most recent trade. Analysts have noted that trading dynamics around the key psychological level at 5.00 may signal option barriers in that area. As we have noted, a break above this level would be a significant technical development and open 5.1277, the May 31 high.
  • A quick reminder that local markets will be closed on Thursday for the Independence Day holiday.

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