U.S. Treasury yield climb keeps US Dollar vs Brazilian Real trading flat

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US dollar drops 0.55% vs real today

Highlights

Rising U.S. Treasury yields driven by energy-related inflation concerns and Middle East tensions are pressuring emerging market currencies like the Brazilian real.
Global central banks' hawkish tone and the upcoming FOMC meeting are intensifying caution and restricting monetary policy.
USD/BRL maintains bearish momentum, trading below major moving averages, with a high probability of further downside toward the R$4.87–R$4.99 range over the next five days.

Rising U.S. yields pressure Brazilian real amid inflation concerns

U.S. Treasury yields recorded an increase on Monday as investors responded to higher oil prices and energy-driven inflation concerns amid the Iran war. This rise in U.S. yields impacts capital flows, making dollar assets relatively more attractive and exerting pressure on emerging market currencies such as the Brazilian real. With the Federal Open Market Committee meeting approaching on June 16-17, market participants have shown added caution, while a recent hawkish stance from central banks globally has contributed to a persistently restrictive monetary environment.

Bearish momentum persists as support holds and resistance caps price

On the technical front, USD/BRL is positioned below the SMA-20 at R$4.9859, SMA-50 at R$5.1179, and SMA-200 at R$5.2834. The Ichimoku Kijun line at R$5.0571 stands out as immediate resistance, while support is defined at R$4.87. Momentum readings are mostly bearish: MACD signals a strong sell, ADX indicates weak trend strength, and BBP is negative intraday. There is a notable divergence with the RSI at 42.4, Stochastic RSI at 100 (overbought), and CCI at -95.0 (oversold). The Awesome Oscillator shows a neutral bias and does not confirm either direction.

Downside risk elevated as price nears key support

Over the next five trading days, USD/BRL is expected to fluctuate within a typical volatility band of R$4.87 to R$4.99. The probability of a further decline exceeds 80%, with downside risk if the pair settles below R$4.87 support. Sustained consolidation near current levels is most likely unless a break above the R$5.06 resistance triggers a reversal scenario.

Anton Kharitonov, expert at Traders Union, sees sustained seller control on USD/BRL, with technical signals and fundamentals both skewed to the downside. Rising U.S. yields and a hawkish global outlook continue to weigh on the Brazilian real. With price below R$4.99 and momentum indicators mixed or negative, he remains cautious. "Base case remains bearish while the pair trades under R$5.06 — I am on the defensive unless we see a confirmed reversal above that level."

Earlier, analysts noted that bearish momentum and persistent resistance continued to weigh on USD/BRL, keeping the outlook negative. The latest shift in global risk sentiment and sustained downside pressure suggest traders should focus on the critical R$4.87 support, as a break below this level could accelerate further declines.

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.