USD/BRL: 50-DMA at 4.97/5.00 is likely to contain upside – SocGen

The BRL strengthened to a one-year high of 4.7595/USD earlier this week. Economists at Société Générale analyze USD/BRL technical outlook.

Break of 4.75 can lead the pair lower towards next supports at 4.69

USD/BRL has achieved the earlier highlighted objective of 4.75 representing projections for the down move. A short-term bounce is not ruled out however the 50-DMA at 4.97/5.00 is likely to contain upside. Failure to cross this could result in continuation of downtrend. 

Break of 4.75 can lead the pair lower towards next supports at 4.69 and more importantly the low formed last year near 4.61/4.59.