USD/BRL: Rebound likely to extend once 4.98 resistance is overcome – SocGen

The Brazilian Real weakened by 0.4% vs. the US Dollar in the first week of 2024 Economists at Société Générale analyze USD/BRL technical outlook.

Defence of 4.84 crucial for continuation in bounce

USD/BRL broke through the key support of 4.84 late last month, but the decline has stalled. The pair quickly crossed above this level denoting a false break. The bounce has so far remained contained near 200-DMA.

Recent pivot high at 4.98 remains an important hurdle. If the pair overcomes this resistance, the rebound is likely to extend towards the trend line drawn since November 2022 near 5.07/5.11.

Defence of 4.84 would be crucial for continuation in bounce.