Can Brazil's central bank rate hold support USD/BRL?

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US dollar vs real rises 0.49% today

Highlights

Brazil's central bank maintained the Selic rate at 13.75%, keeping one of the highest real interest rates among major economies.
Monetary tightness has resulted in persistent weakness for the Brazilian real, which reached a six-month low recently.
USD/BRL remains bullish above short, medium, and long-term trend indicators, forecast to consolidate between R$5.505 and R$5.5604 over the next 2 to 3 days.

Real weakness persists as central bank maintains high rates

Brazil's central bank kept the Selic benchmark interest rate unchanged at 13.75% on November 4, according to Riotimesonline, maintaining one of the highest real interest rates among major economies. This decision reduces the relative attractiveness of the Brazilian real by limiting potential yield compression and sustains demand for the US dollar in the USD/BRL pair. Persistent monetary tightness has contributed to ongoing weakness in the real, which recently marked its lowest level in over six months.

Technical momentum sustained above supports amid subdued volatility

Technically, USD/BRL remains above the MA-20 and MA-50 on the working timeframe, and is positioned well above the MA-200, reinforcing the longer-term trend. The Ichimoku Kijun sits at R$5.5086, acting as the nearest support zone. The current price action is supported by strong buy signals from MACD and the Awesome Oscillator, whereas ADX remains neutral. Oscillators like RSI, Stochastic RSI, and CCI all show neutral readings, indicating the price is not overbought or oversold. Bull/Bear Power is modestly positive, suggesting buyers are still active intraday, though low volatility and an insignificant prior gap temper conviction for aggressive extension.

Sideways consolidation likely as breakout risks skew upward

Over the next two to three trading days, USD/BRL is expected to consolidate within a typical volatility band between R$5.505 and R$5.5604. The dominant scenario is sideways movement within this range. There is a 62% probability of an upward break, while a downside move has a 38% likelihood. A bullish outcome would see a clear push above the upper resistance, whereas a bearish development would be signaled by a sustained drop below immediate support at the Ichimoku Kijun.

Viktoras Karapetjanc, expert at Traders Union, sees persistent pressure on the Brazilian real following the central bank’s decision to keep the Selic rate unchanged at 13.75%. He believes high rates limit the real's appeal and support continued demand for USD/BRL. Technical and sentiment indicators suggest the pair will maintain its positive tone, with buyers remaining active. The dominant scenario is for consolidation above R$5.505, with increased odds of an upward break. "With monetary policy steady and momentum favoring the dollar, I expect buyers to remain in control as long as R$5.5086 holds," says Karapetjanc.

Earlier, analysts noted that USD/BRL was demonstrating sustained bullish momentum, driven by strong technical signals despite increased correction risks. The current setup reinforces this view with neutral oscillators and ongoing support above key trend levels, so traders should monitor the R$5.5604 upper boundary for signs of a potential breakout in the coming days.

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.