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USDBRL Rejects 5.20 Resistance, But Momentum Remains Bullish

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  • The global risk off environment combined with the significant CNY depreciation has been weighing on EM currencies in recent weeks.
  • We saw that BRL switched from the top FX performer in Q1 to one of the weakest performing currencies among the EM world in Q2, down nearly 8% against the Dollar since the beginning of April.
  • Even though USDBRL rejected the 5.20 resistance yesterday and is currently trading back below its 100DMA (5.16), momentum on the pair remains bullish as market uncertainty remains high.
  • Next key level to watch on USDBRL stands at 5.2920 (200DMA).
  • On the downside, support to watch stands at 5.0805, which corresponds to the 38.2% FIbo retracement of the 4.59 – 5.8740 range.

Source: Bloomberg/MNI


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  • The global risk off environment combined with the significant CNY depreciation has been weighing on EM currencies in recent weeks.
  • We saw that BRL switched from the top FX performer in Q1 to one of the weakest performing currencies among the EM world in Q2, down nearly 8% against the Dollar since the beginning of April.
  • Even though USDBRL rejected the 5.20 resistance yesterday and is currently trading back below its 100DMA (5.16), momentum on the pair remains bullish as market uncertainty remains high.
  • Next key level to watch on USDBRL stands at 5.2920 (200DMA).
  • On the downside, support to watch stands at 5.0805, which corresponds to the 38.2% FIbo retracement of the 4.59 – 5.8740 range.

Source: Bloomberg/MNI