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.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Bullish
USD/JPY
Bearish
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
Gold
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
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.57%, while traders in France 40 are at opposite extremes with 84.00%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/lCP80FZFD8
  • Commodities Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.14% Gold: -0.53% Silver: -0.78% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/EGNbk1OlkQ
  • RT @TradeFloorAudio: UK Bookmaker Paddy Power cuts the odds of a Conservative Party majority at upcoming #GE2019 from 4/7 to 4/9 .... It ha…
  • Forex Update: As of 08:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.41% 🇳🇿NZD: 0.12% 🇪🇺EUR: 0.09% 🇨🇭CHF: -0.02% 🇦🇺AUD: -0.02% 🇯🇵JPY: -0.17% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/0Z5fYqqkex
  • LIVE NOW: Join Market Analyst @DavidCottleFX for a look ahead at the major economic data which will drive Asia Pacific markets in the coming seven days. Register here: https://www.dailyfx.com/webinars/985612483?CHID=9&QPID=917720
  • Indices Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.19% US 500: 0.17% Germany 30: 0.11% France 40: 0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/GLPREk9GG5
  • Why financial market traders must monitor both monetary and fiscal policy?Find out from @MartinSEssex here: https://t.co/Fkzk88Y5gm https://t.co/BCtPSUCBO9
  • LIVE IN 30 MIN: Join Market Analyst @DavidCottleFX for a look ahead at the major economic data which will drive Asia Pacific markets in the coming seven days. Register here: https://www.dailyfx.com/webinars/985612483?CHID=9&QPID=917720
  • European Opening Calls From IG: #FTSE 7302 -0.02% #DAX 13229 -0.10% #CAC 5936 -0.06% #AEX 599 +0.03% #MIB 23521 -0.29% #IBEX 9248 -0.14% #STOXX 3708 -0.09%
  • 🇨🇳 CNY Foreign Direct Investment (YoY) (OCT), Actual: 7.4% Expected: N/A Previous: 3.8% https://www.dailyfx.com/economic-calendar#2019-11-18
USDBRL, Ibovespa Wobble at Key Price Levels Ahead of GDP Data

USDBRL, Ibovespa Wobble at Key Price Levels Ahead of GDP Data

2019-05-30 00:30:00
Dimitri Zabelin, Junior Currency Analyst
Share:

TALKING POINTS – BRAZIL GDP, BRL FORECAST, IBOVESPA, TRADE WARS, PENSION REFORM

  • BRL, Ibovespa eyeing local inflation, GDP data
  • Analysts are expecting weakness in first quarter
  • How could this impact Brazil’s monetary policy?

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

BRL and the benchmark Ibovespa equity index will be at the mercy of upcoming inflation and Q1 GDP data. Quarter-on-quarter forecasts have the economy contracting 0.2 percent in Q1, while year-on-year growth is expected to show a 0.5 percent reading. Central bank officials at the most recent policy meeting stated that weakness at the end of last year has continued into the first breathes of 2019.

Volatility and capital flight are more likely to occur if the report shows that the economy contracted even more than economists were anticipating. USDBRL in this scenario would likely jump above 4.0000 after recently breaking below it, and Ibovespa futures will likely find themselves once again below the 11-month rising support. Brazilian assets may struggle to recover if data undershoots the already-low low forecast.

Will USDBRL have enough resolve to continue above 4.0000?

Chart analysis: USDBRL

This comes on the heels of a recent meeting between Brazilian Vice President Hamilton Mourao and high-level Chinese officials where both parties discussed ways in which to promote investment and deepen commercial ties. Officials in San Paulo have done their best to navigate between the US-China trade war by taking a neutral stance in order to avoid losing access to both markets.

However, while Latin America’s largest economy may avoid being in the direct line of fire, weakening demand out of China – a key trading partner and significant consumer of Brazilian soybean products – will continue to affect Brazil’s economy. Deteriorating diplomatic ties between Beijing and Washington have played a role in causing capital flight from BRL and the Ibovespa as investors’ risk appetite sours.

Eroding confidence in the government’s ability to pass key structural reforms has also been a factor that has spooked investors. Unless officials in Sao Paulo can manage to push them through Congress this year, economists estimate that the probability of a recession over the next two years will increase. This could then ripple out into global financial markets and add uncertainty to an already-cloudy outlook for global growth.

Ibovespa futures struggle to stay above rising support

Chart analysis: Ibovespa

BRL 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

News & Analysis at your fingertips.