USD/BRL resistance test: Key levels to watch

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US dollar rises 0.38% to R$5.1831

Highlights

US inflation figures produced a modest rise, leading to greater demand for the dollar and expectations of further monetary tightening.
The dollar index traded near an eight-day high, with markets awaiting commentary from central bankers at the Jackson Hole symposium for guidance on USD/BRL.
USD/BRL showed strong bullish momentum with prices expected to range from R$5.1572 to R$5.209 over the next 2 to 3 days; bullish probability is very high.

Hawkish Fed expectations lift demand ahead of Jackson Hole signals

Recent US inflation data has shown a modest uptick, which has influenced the currency markets by bolstering demand for the US dollar, according to Economictimes Indiatimes. This development positions the dollar near an eight-day high, reflective of increased expectations regarding US monetary tightening. Market focus has now shifted toward further commentary from central bankers at the Jackson Hole symposium, which may provide additional guidance for USD/BRL direction.

Bullish setup confirmed as buyers dominate amid mixed technicals

On the technical front, USD/BRL trades firmly above the MA-20 and MA-50 on the hourly chart and remains well above the long-term MA-200, reflecting a bullish setup across short-, medium-, and long-term timeframes. The Ichimoku Kijun level at R$5.1587 provides immediate support. MACD signals strong bullish momentum, while ADX stays neutral, calling for some caution. RSI sits in a moderate buy zone, Stochastic RSI points to a strong buy signal, while CCI is neutral and Awesome Oscillator also remains neutral. Bull/Bear Power indicates that buyers are in control.

High odds of consolidation as volatility defines bullish breakout risk

Over the next 2 to 3 trading days, USD/BRL is expected to consolidate within the R$5.1572 to R$5.209 range based on typical volatility. The probability for an upward move is very high, with only a low chance for a breakdown below current support. The baseline scenario is for continued range trading, with a breakout above R$5.209 marking the bullish case and a decline below R$5.1572 as the bearish scenario.

Anton Kharitonov, analyst at Traders Union, sees current USD/BRL momentum as fueled by recent inflation data and technical strength above key averages. He notes that sentiment is mildly bullish but cautions that daily gains remain modest and numerous technical indicators signal mixed signals. Kharitonov believes consolidation is the more likely scenario for now, with limited upside unless R$5.209 is decisively breached. "Until we see a clear breakout above R$5.209, caution is warranted and I would avoid aggressive long positions," he says.

Earlier, analysts noted that USD/BRL was moving higher as bullish momentum began to take hold, despite lingering longer-term bearish factors. The latest analysis reinforces this view with renewed technical strength and an improving fundamental backdrop, making a sustained consolidation above immediate support a key scenario to monitor in the coming sessions.

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

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.