Positive momentum builds in USD/BRL – Société Générale

The Brazilian Real (BRL) remains under mild pressure as USD/BRL holds above 5.27, with technical signals pointing to further upside while support at 5.37 stays intact, Société Générale’s FX analysts note.

USD/BRL turns constructive above 5.37 support

“USD/BRL formed an interim low near 5.27 last month resulting in a short-term bounce. It has crossed a multi-month descending trend line. Daily MACD has been posting positive divergence highlighting receding downward momentum.”

“If a short-term pullback develops, graphical levels near 5.37 may provide support. Defence of this may lead to continuation in rebound. The next hurdles are located at the 200-DMA near 5.63 and May highs of 5.73/5.76.”