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BRAZIL: USDBRL Dips Remain Very Well Supported, Late 2022 Highs Breached

BRAZIL
BulletGlobalEM BulletEmerging Market News
  • Despite a very moderate downtick at the open, USDBRL has shot higher once more, cementing a break of the late 2022 highs at 5.5296 and building momentum through yesterday’s peak.
  • President Lula continues to commentate on the division between the administration’s desire for a lower Selic rate and the current BCB cautious stance to counter de-anchored inflation expectations. 
  • Combined with the well-known uncertain fiscal backdrop, USDBRL dips remain very well supported. The pair is now narrowing the gap to 5.60 round number resistance and signals scope for a move towards 5.6428 - the 1.236 projection of the Dec27 '23 - Apr 16 - May 3 price swing. Latest BCB Focus survey will be released on Monday. 
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  • Despite a very moderate downtick at the open, USDBRL has shot higher once more, cementing a break of the late 2022 highs at 5.5296 and building momentum through yesterday’s peak.
  • President Lula continues to commentate on the division between the administration’s desire for a lower Selic rate and the current BCB cautious stance to counter de-anchored inflation expectations. 
  • Combined with the well-known uncertain fiscal backdrop, USDBRL dips remain very well supported. The pair is now narrowing the gap to 5.60 round number resistance and signals scope for a move towards 5.6428 - the 1.236 projection of the Dec27 '23 - Apr 16 - May 3 price swing. Latest BCB Focus survey will be released on Monday.