EUR/BRL technical analysis: Seller pressure dominates with support at R$5.5387 in focus

Traders Union
All News
Currency
Euro vs Brazilian real down 0.5% today

Highlights

EUR/BRL currency movements remain volatile as Brazil's presidential election developments alter investor positioning and risk exposure.
Monetary policy updates in Brazil add to event-driven and policy-driven flows impacting EUR/BRL trading dynamics around October 11.
EUR/BRL remains in a bearish trend across all timeframes with strong sell signals from technical indicators and projects a range of R$5.5387 to R$5.5943 in the short term.

Election updates and policy changes drive shifting sentiment in trading

Recent currency movements between the euro and Brazilian real have been recorded alongside ongoing monetary developments in Brazil, according to Riotimesonline. Updates related to the Brazilian presidential election are contributing to shifts in investor positioning and sentiment, influencing the cross-currency dynamic. These factors have introduced a mixture of event-driven and policy-driven flows into EUR/BRL trading around October 11.

Bearish momentum persists as technical signals reinforce downside pressure

EUR/BRL currently trades below the MA-20 (R$5.5859) and MA-50 (R$5.6045) on the hourly chart, in addition to remaining well under the MA-200 (R$5.9119) on the daily timeframe. The Ichimoku Kijun at R$5.5874 marks immediate resistance. Momentum indicators are negative: MACD and ADX both show a Sell signal, with RSI at 35.28 also favoring a bearish stance. Stoch RSI and CCI are in Oversold territory, hinting at possible short-term exhaustion, though the dominant seller bias remains, as confirmed by negative Bull/Bear Power.

High downside risk prevails as breakout odds remain limited

In the short term, EUR/BRL is projected to move within a range of R$5.5387 to R$5.5943 over the next two to three trading days. The likelihood of an upward breakout is considered very low, while a downward move carries a very high probability. A baseline scenario sees the pair holding range-bound. A decisive break above R$5.5874 would be necessary to confirm a bullish reversal, whereas a drop below R$5.5387 support would indicate further downside.

Anton Kharitonov, analyst at Traders Union, highlights that EUR/BRL remains technically weak below all key moving averages with accelerating bearish momentum. He notes that ongoing political and monetary developments in Brazil dampen sentiment and fuel event-driven selling. Base case sees the pair staying in a narrow range, with downside holding a higher probability unless resistance at R$5.5874 is convincingly breached. "Until EUR/BRL breaks above R$5.5874, the seller bias remains dominant and I stay defensive on the pair."

Earlier, analysts noted that Euro vs Brazilian Real was under persistent selling pressure, characterized by a broadly negative technical outlook. Fresh signals in the current analysis reinforce this bearish assessment, with the decisive level for traders to monitor now being a potential break below R$5.5387, which would signal further downside risk.

Source of Data: EUR 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.