In view of Axel Rudolph, Senior Analyst at Commerzbank, USD/BRL’s rise from the October spike low at 3.5859 is about to reach the 55 day moving average at 3.8520.
“The next higher June and July highs at 3.8789/3.9671 may still be reached over the coming weeks, provided that no unexpected drop below the October low at 3.5859 is seen. En route are the July 12 high and the 50% retracement at 3.9004/15.”
“Only if an unexpected drop below the recent low at 3.5859 were to be seen, would we have to turn bearish and target the 55 week moving average at 3.5852 and also the 61.8% Fibonacci retracement of the 2018 advance at 3.5399.”
“Support above the recent low at 3.5859 comes in between the June, July and August lows and also the 200 day moving average at 3.7027/3.6709.”