USD/BRL has successfully defended the bullish gap near 5.01 recently, resulting in a steady bounce. 5.62/5.66 is expected to be an important resistance, economists at Société Générale report.

Risk of deeper pullback on a dip below 5.01

“The pair is now approaching the July high of 5.51 and more importantly heading towards the descending trend line drawn since 2020 at 5.62/5.66. This is expected to be an important resistance; cross above can result in next leg of uptrend.”

“Only if USD/BRL establishes itself below 5.01, there could be a risk of a deeper pullback.”