USD/BRL: Psychological mark at 6.00 to cap the leg higher – Credit Suisse

USD/BRL is trading at 5.32 but the pair is forecast to move higher towards the key psychological barrier at 6.0000 which is expected to cap, according to analysts at Credit Suisse.

Key quotes

“USD/BRL maintains its large multi-year bullish ‘triangle’ continuation pattern from Q1, with the ‘measured pattern objective’ met during Q2 at the 5.9726 high for a sharp reversal back lower. This weakness has come to a halt ahead of the 61.8% retracement of the 2020 surge at 4.7558 for a move back higher.” 

“We look for large higher level range to play out, with the short-term risks skewed higher for a fresh test of the current year high and psychological barrier at 5.9714/6.0000, which we expect to cap to define the top end of the range, with 4.7558 expected to floor the market.”

“Below 4.7558 can instead see a move back to the 200-day average at 4.6522 and then to the 78.6% retracement and ‘neckline’ to the large base at 4.4253/3386.”