currency pair

USD /BRL at the end of last year shows a downward movement and at the moment, despite some slowdown in the fall of the dollar, its nature has not changed. In July this year the couple crossed the level of 61,8% of Fibonacci from the previous upward movement, indicating a full-fledged trend downward, but not correction.

On the daily chart (Figure 1) we see the intersection of exponential moving averages with different periods. So, June 3 moving average with a period of 89 crossed the longer moving average with a period of 144 top-down, indicating a bearish trend.

Fig. 1

Source: Reuters

Lines of the trend indicator MACD on the daily chart (Fig. 2) after a failed attempt to rendezvous gone and currently continues to move in one direction, which also confirms the current trend.

Fig. 2

Source: Reuters

Directional Movement Indicators DI and-DI (Fig. 2) indicate a possible consolidation near current levels, as appropriate close enough to each other. At the level of 1.8053 is the line Fibonacci (76.4%), which may be briefly withhold the current downward trend. Nevertheless, the line-DI is above the DI, so the trend is still downwards, and the divergence lines Bollinger (Fig. 3) shows the increasing trend.

Fig. 3

Source: Reuters

As stochastic indicators, then you can stay on a slow stochastics, which provides more accurate signals due to lower volatility. However, this type of indicators for trending movement should be used with caution. Twenty-third day of September crossed the line% K% D top-down, which can be regarded as a signal to sell (Figure 2).

Thus, we expect that the pair USD /BRL in the long term will continue to further downward movement, whose goal is the beginning of the previous uptrend 1.55, while, in the way of a possible consolidation in the next historically significant support levels: 1,76, 1 , 71, and 1.65 (Fig. 4). In the case of correction closest resistance level is near 1.92. Current price is 1.7985 reais per dollar.

Fig. 4

Source: Reuters

 

 

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