USD/BRL: The retreat is just a correction – Credit Suisse

USD/BRL is retreating, but weakness is seen as corrective for now, in the opinion of analysts at Credit Suisse. The pair reached a high on 14 May at 5.972 and has pulled back since then, currently trading at 5.756.

Key quotes

“USD/BRL is seeing some corrective weakness and given the bearish weekly RSI divergence this is seen having scope to extend further yet.” 

“Our core bias remains to the upside and we look for further strength to unfold over the medium-term. The market has stalled at the psychological barrier at 5.97/6.00, however, we see scope for a break above here, with next resistance at 6.21.” 

“Support at the 55-day average and 38.2% retracement of the 2020 surge at 5.23/22 ideally holds the setback.”