USD/BRL to drop towards the 2019-2021 support line at 4.8999 – Commerzbank

USD/BRL is about to hit the December low at 5.0106 with the 2019-2021 support line at 4.8999 being next in line, as Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, notes.

Resistance can be seen between the mid-January and May lows at 5.1919/80

“USD/BRL is making a beeline for the December trough at 5.0106 as well as the psychological 5.0000 mark. Around it the currency pair may short-term stabilize.”

“Over the coming days the 2019-2021 support line at 4.8999 will remain in focus, though. Further down lies the June 2020 low at 4.8180.”

“Resistance can now be seen between the mid-January and May lows at 5.1919/80. Further minor resistance can be found at the 5.3044 February low and also between the April low and the late May high at 5.3276/5.3746.”

“Only a currently unexpected rise above the 5.3746 recent high would neutralize our view and put the March low and the 200 and 55-day moving averages at 5.4257/5.4486 as well as the January high at 5.5163 on the map.”