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USDBRL In Close Proximity To Significant 5.4750 Resistance

BRAZIL
  • USDBRL remains in close proximity of the Aug/Sep highs following a shaky start to the week for the local currency.
  • It is worth noting the recent central bank action with officials quick on announcing an intervention program to offset year-end demand tied to hedge adjustments, as well as auctioning an extra 10,000 FX swap contracts on Sept. 30 when the currency was close to breaching the 5.48 level.
  • If the pair were to hold below this resistance, initial support resides at the 50-day EMA around 5.26.
  • A break of the 5.4759 highs would indicate a resumption of the bullish uptrend and represent the highest levels traded since May this year, potentially setting up a larger move to significant resistance around 5.80.
  • Today's Data includes industrial production figures for August which may provide new insight on economic activity strength:
    • 1300BST/0800ET: Aug. Industrial Production YoY, est. 0%, prior 1.2%
    • 1300BST/0800ET: Aug. Industrial Production MoM, est. -0.3%, prior -1.3%
    • 1400BST/0900ET: Sept. Markit Brazil PMI Composite, prior 54.6
    • 1400BST/0900ET: Sept. Markit Brazil PMI Services, prior 55.1

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