USD/BRL recently took support at the previous bullish gap of 5.01 and has staged a steady bounce. First hurdle is located at last month's high of 5.32, a break above here would open up room for further gains, economists at Société Générale report.

Defending 5.01 crucial to avert a deeper pullback

“Daily MACD is attempting an entry within positive territory which would denote regain of upward momentum.”

“If USD/BRL reclaims 5.32, the bounce could extend towards 5.51 and perhaps even towards the multiyear descending trend line near 5.66/5.72.”

“Defending 5.01 would be crucial to avert a deeper pullback.”