It's interesting to note that the USDBRL pair hasn't risen any further despite the route in the Brazilian bond market and the Fed rate hike this week. Of course, both were largely priced into the market. We're currently at one of those crossroads where fundamentals favor further US dollar strength against the Brazilian real whereas technical analysis suggests that...
DJ Brazilian Real Looks Overvalued -- Market Talk - WSJ
7:54 ET - Considering Brazil's economic and political problems, the recent appreciation of the Brazilian real versus US dollar makes the Brazilian currency overvalued. "Our BRL model, which compares the current pricing with the average of emerging market currencies controlling to the country's risk of default...
USD/BRL could not loose the strong support this week. Native speaking is the equivalent R$ 3.774 (dolz15) lost this number we could reach R$3.730 (60 min head and shoulder last target). If this currency proceed the falling path it could stop only in R$3650 (target of another pattern, bigger then the previews).
Above the more important number is the 38373 or...
The Brazilian Real posted its biggest rally since November 2008 Thursday on threats by the country's monetary authority that it may intervene in the FX market to curb its dive. Can the group offset an underlying market current of risk aversion? Or, can the Real's move signal a reversal for the broader Emerging Markets? Unlikely on both accounts.
