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Axel Rudolph, Senior Analyst at Commerzbank, suggests that USD/BRL’s rise from the October spike low has taken it all the way to the late November high at 3.9436 below which they expect it to range trade in the course of this week.

Key Quotes

“Immediate upside pressure should be maintained, though, while the mid-November high and the two month uptrend line at 3.8352/08 underpin.”

“If this support area were to give way the mid-October high at 3.7880 would be next in line.”

“Further, stronger support comes in between the June, July and August lows and also the 200 day moving average at 3.7187/3.6709.”

“Were the recent high at 3.9436 to unexpectedly bettered, the June and July highs at 3.9527/3.9671 would be in focus, together with the 61.8% Fibonacci retracement at 3.9746. This area we would expect to cap, were it to be reached.”