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BRL Shrugs Off Weak Retail Sales Data

BRAZIL
  • Despite Brazil retail sales falling in May as consumers spent less on food in supermarkets and hypermarkets, the local currency has edged moderately higher following the open, sending USDBRL to fresh weekly lows below 4.7850 and extending the substantial recovery for the Real this week.
  • Overall, the pair remains in a downtrend and the climb between Jun 22 - Jul 6, appears to be a technical correction. For bears, the move lower on Jun 9 resulted in a break of 4.8859, the May 15 low and this confirmed a range breakout and a resumption of the medium-term downtrend. The bear trigger lies at 4.7513, the Jun 22 low and a resumption bearish price action would open 4.6910, the May 30 2022 low.
  • The data schedule is light next week and the focus will be on Monday’s economic activity figures as well as the latest Focus survey of expectations from the central bank.

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