Why is USD/BRL down 0.6% today?

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Us dollar/brl slips 0.66% today

Highlights

US Treasury will double long-term bond buybacks to at least $4 billion per session from September 9 to November 4.
US long-end Treasury yields declined and the dollar weakened briefly after the announcement, with analysts seeing limited immediate monetary policy impact.
USD/BRL trades above key moving averages, with an 80% probability of moving higher toward R$5.1994 as technical signals favor upside.

US buyback expansion curbs yields as dollar faces temporary selling

US Treasury announcements led to a doubling of long-term government bond buyback operations from $2 billion to at least $4 billion per session starting September 9 and running through November 4. This action resulted in a decrease in US long-end Treasury yields and brief weakness in the US Dollar, as the DXY index fell below 99. Analysts noted that the effect on the currency could be limited and do not expect immediate changes to US monetary policy, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees the recent dip in USD/BRL as technically fragile. He notes the pair trades above all major moving averages yet sits uncomfortably near support at R$5.1618. Kharitonov points to weak follow-through despite bullish momentum signals and highlights that low ADX and neutral oscillators reveal underlying hesitation. He remains wary of overstating the impact of US Treasury operations, observing limited bottoming interest amid broader selling pressure. "Until buyers defend R$5.1618 convincingly, I remain skeptical of lasting upside in USD/BRL," he warns.

Viktoras Karapetjanc, expert at Traders Union, believes the bullish structure in USD/BRL is intact after resilient price action above all key moving averages. He sees the Treasury’s increased buyback as supportive for risk sentiment and expects market flows to favor buyers, reflected in strong momentum and high probability for upside. Karapetjanc emphasizes the wide volatility band and constructive technical signals, suggesting further growth opportunities. "A break above R$5.1994 will likely trigger fresh bullish setups as positive sentiment persists," Karapetjanc asserts.

Sholanke Dele, market strategist, views the current USD/BRL move with caution and notes the brief decline was led by US Treasury buyback headlines. She observes persistent selling pressure around support and highlights that volatility remains elevated even as momentum appears divided. Dele warns that macro signals from US monetary policy outlook introduce further downside risks for the pair. "If R$5.1618 is breached, traders should brace for deeper losses as bearish macro forces gain traction," states Dele.

Bullish technical signals as USD/BRL tests support on mixed momentum

USD/BRL is trading above the 20-day, 50-day, and 200-day moving averages (R$5.1416, R$5.1361, and R$5.1411), reflecting near-term strength across short, medium, and long-term trends. Immediate levels to watch are the near-term ceiling at R$5.1994 and the near-term floor at R$5.1618, with the Ichimoku Kijun (R$5.1485) providing underlying support; the long-term trend context remains bearish. Relative Strength Index (RSI), MACD, and Commodity Channel Index (CCI) all signal bullish momentum, with RSI at 58.13 in buy territory. BBP is positive at 0.0274, indicating that buyers dominate intraday. Average Directional Index (ADX) is neutral at 14.06, and the Stochastic RSI and Awesome Oscillator both remain neutral, highlighting some divergence amid upward signals. The pair has slipped to R$5.1634, down 0.66% on the day, opening nearly flat and now trading near the lower end of today’s range. Intraday volatility stands at 0.91%, with mild pressure prevailing after the open and indicators showing momentum battles around support levels.

Earlier, analysts noted that USD/BRL faced increased downside risk as technical signals and resistance levels pointed to prevailing selling momentum. The current backdrop, however, reveals a shift toward bullish momentum indicators and a higher probability of an upward move, positioning R$5.1994 as a key resistance level to monitor for potential continuation.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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