May 13, 2022 12:33 GMT
- 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.