News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • President Biden: - We agreed to do more to enhance the resilience of critical infrastructure around the world - More work to do to beat the virus; we cannot let our guards down
  • AUD/USD is little changed from the start of the year as the Reserve Bank of Australia (RBA) remains reluctant to normalize monetary policy. Get your $AUDUSD market update from @DavidJSong here:https://t.co/nkHYQMMv4F https://t.co/V70PNu3FRd
  • President Biden: - Endorsed new (NATO) cyber defense policy - Adopted climate security plan (NATO)
  • Bitcoin slightly off its intraday highs, currently trading back below $40,000 #Bitcoin $BTCUSD https://t.co/MYISOU8c9B
  • The US 10Y beginning to retrace some of last week's rally, slowly crawling back towards 1.50% https://t.co/P2a5fHQUlq
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.03% Silver: -0.22% Gold: -0.70% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/XxGZAbPEdL
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Gold are long at 74.73%, while traders in France 40 are at opposite extremes with 78.49%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/7XIu5r1o2l
  • #Euro Forecast: $EURUSD Falters at Yearly Open Resistance- #FOMC Levels - https://t.co/uWukTncIRg https://t.co/dn84mhHxQx
  • The gold monthly opening-range is set just below confluence resistance – breakout to offer guidance. Get your $XAUUSD market update from @MBForex here:https://t.co/19rCMiLlxG https://t.co/uFGK8q14KG
  • WTI Crude Oil Breakout (Update) https://www.dailyfx.com/forex/analyst_picks/todays_picks/james_stanley/2021/06/14/wti-crude-oil-breakout-update.html $oil #oott https://t.co/UGOItnUhgd
BRL Chart Analysis: Bearish Outlook Ahead of CPI Data, Trade Wars

BRL Chart Analysis: Bearish Outlook Ahead of CPI Data, Trade Wars

Dimitri Zabelin, Analyst

TALKING POINTS – TRADE WAR, IBGE INFLATION IPCA-15, BRL, IBOVESPA

  • Fading optimism over US-China trade resolution nauseating markets
  • Brazil inflation data may skew inflationary risks and monetary policy
  • Pension reform progress remains a headline risk to economy outlook

See our free guide to learn how to use economic news in your trading strategy!

The Brazilian Real may find itself under pressure after local inflation data is published. Month-on-month price growth is expected at 0.41 percent, slightly lower than the previous report at 0.72 percent. The Brazilian economy at this time is in a fragile state by virtue of the uncertainty caused by the US-China trade war and local structural reforms. The latter is arguably one of the biggest drivers of price action in Brazilian markets.

Earlier this month, the Brazilian central bank announced that it was going to hold the benchmark Selic rate at 6.50 percent – as expected. Policymakers noted that while local economic activity was weaker, inflationary risks remain broadly “symmetrical”. This has allowed monetary authorities the luxury of holding rates while local pension reforms talks continue, though external headwinds and local CPI may derail their neutrality.

Additional risks to inflationary pressure include the current state of Brazil-China relations. Yesterday marked the first day of investment negotiations between Brazilian Vice President Hamilton Mourao and high-level Chinese officials. If the negotiations between the two emerging market giants go well, it could boost sentiment in the Brazilian economy and provide a tailwind for inflation.

However, whatever deal is achieved between China and Brazil will likely be offset by souring relations between Beijing and Washington. Both sides appear to be digging their heels in with US President Donald Trump now adding additional measures involving Chinese tech-leviathan Huawei. Finding a resolution now against what is an already-unhospitable backdrop will likely only continue to sour global sentiment.

BRL PRICE CHART ANALYSIS

The Brazilian Real has been rapidly falling against the US Dollar, with USD/BRL recently puncturing the 4.000 landmark. The last time the pair reached this level was back in October of 2018. The pair appear to be hovering just above what may be a new psychological floor. The long wicks on both sides of the short-bodied daily candles indicates indecision.

USDBRL reaching October 2018-highs… But for how long?

Chart Showing USDBRL

It appears that only a favorable – or unfavorable – fundamental development in either the pension reforms or US-China trade relations will be a key force in determining the pair’s bearish or bullish trajectory. Looking ahead, monitoring these crucial factors will be essential to maintaining a well-informed trading strategy. To learn more about Brazilian assets, you may follow me on Twitter @ZabelinDimitri.

FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES