- USD/BRL dropped towards 4.8475 and has already lost more than 2% in September.
- On Tuesday, markets expect the central bank’s primary surplus to stand at BRL 16.8 billion.
- The dollar is trading lower, consolidating ahead of the Fed meeting on Wednesday.
In Monday’s session, the USD/BRL continued to lose ground and has already recorded a drop of 2.17% in September, falling to its lowest point since mid-August, at 4.8475.
On the BRL side, it is gaining ground as the Brazilian government has undertaken fiscal reforms, which are expected to have a positive impact on the government’s accounts. Budget data will be reported on Tuesday, with the primary surplus expected to have doubled to BRL 16.8 billion from BRL 7.1 billion in March. Additionally, the Real could also gain momentum with Thursday’s Gross Domestic Product (GDP) results and trade data.
On the Dollar side, it is trading lower against its rivals, and its US Dollar Index is consolidating. However, US Treasury yields remain high, cushioning their losses. Looking ahead to Wednesday’s Federal Reserve (Fed) meeting, markets expect a hawkish pause, with the bank signaling that the tightening cycle is not over yet. Investors will also keep an eye on new macroeconomic forecasts and revised dot charts to further shape their expectations for the upcoming meetings. In this sense, the Fed’s tone will impact the price dynamics of the US dollar and could therefore limit the pair’s decline.
USD/BRL Levels to watch
Technical indicators on the daily chart indicate that USD/BRL sellers are ahead. The downward slope of the Relative Strength Index (RSI) reinforces this negative sentiment, as does the MACD, which shows red bars, indicating strengthening bearish momentum. Furthermore, the pair is below the 20,100 and 200-day simple moving averages (SMA), suggesting that the bears are firmly in control of the overall picture.
Support levels: 4.8427, 4.8115, 4.7880.
Resistance Levels: 4.8902 (100-day SMA), 4.9143 (20-day SMA), 4.9450.
USD/BRL Daily Chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
