USD/BRL recently defended the bullish gap near 5.01 resulting in a steady bounce. Only a dip below here would risk a deeper pullback, economists at Société Générale report.

USD/BRL to target 5.51 if 5.42 gives way

“USD/BRL is evolving within two converging trend lines forming a symmetrical triangle. The pattern denotes a clear direction is lacking. This is also highlighted by crisscross moves around the 200-Day Moving Average.” 

“If the pair breaks above the upper limit at 5.42, a move towards July high of 5.51 and the descending trend line drawn since 2020 at 5.62/5.66 is expected. This is an important resistance zone.”

“Only if the pair breaks below 5.01 would there be a risk of a deeper pullback.”