USD/BRL: Decline to extend on failure to defend 4.89 – SocGen

Economists at Société Générale analyze USD/BRL technical outlook. 

Downward momentum is still prevalent

USD/BRL downtrend has tentatively paused after forming interim low near the 4.89 mark, however, it has struggled to reclaim the 200-Day Moving Average (DMA) near 5.17/5.20. This denotes the downward momentum is still prevalent.

In case the pair fails to defend the 4.89 point, the phase of decline is expected to extend. 

Next potential objectives are located at projections of 4.80/4.75 which is also the 76.4% retracement from April 2022.