USD/BRL: wait for the opportunity

USD/BRL: wait for the opportunity

2019-12-09 • Updated

Trade idea

SELL 7.1250; TP 4.0910; SL 4.1355

USD/BRL has started the week with a substantial move to the downside. The pair formed a lower high last week, thus the price action strongly resembles the “Head and Shoulders” pattern. The daily close below 4.1655 will confirm the bearish scenario. At the same time, selling at the current levels seems premature as there’s support in the form of the 50-day MA (4.1355) and the 50% Fibonacci retracement of the October-November advance (4.1275). A new wave of selling will occur if the pair falls below the latter. The target in this case will be at 4.0910 (61.8% Fibo). Before there’s a breakout, the price may consolidate above the mentioned support for some time. A return above 4.21 is needed to return powers to bulls.

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