Forex Market: USD/BRL daily trading outlook

Yesterday’s trade saw USD/BRL within the range of 2.2593-2.2358, the lowest in a month. The pair closed at 2.2415, shedding 0.25% on a daily basis.

At 8:43 GMT today USD/BRL was up 0.01% for the day to trade at 2.2401, having shifted in a daily range between 2.2397 and 2.2454.

United States

The Commerce Department’s Bureau of Economic Analysis is expected to report that its Core Personal Consumption Expenditure (PCE) Price Index rose by 0.1% in July on a monthly basis after gaining 0.1% in June. Year-on-year, Core PCE added 1.5% in June.

The general PCE Price Index added 0.2% in June on a monthly basis, while year-on-year it was up 1.6% in June.

Personal spending is projected to have jumped by 0.2% in July from a month earlier, when the index registered 0.4% growth. Personal income likely gained 0.3% in July, down from 0.3% during the preceding month.

A separate report prepared by MNI Deutsche Börse Group may show that manufacturing activity in the Chicago region expanded in August for the 16th straight month. The respective Chicago PMI index is projected to come in at 56.0 after sliding to 52.6 in July from 62.6 in June.

The monthly survey by Thomson Reuters and the University of Michigan may show that consumer confidence in the United States worsened in August. The corresponding index probably slid to 81.0 during the current month from 81.8 in July. A preliminary reading earlier in the month pointed to a decline to 79.2.

The survey encompasses about 500 respondents throughout the country. The index is comprised by two major components, a gauge of current conditions and a gauge of expectations. The current conditions index is based on the answers to two standard questions, while the index of expectations is based on three standard questions. All five questions have an equal weight in determining the value of the overall index. In case the gauge of consumer sentiment showed a larger improvement than projected, this would boost demand for the dollar. The official reading is due out at 13:55 GMT.

Brazil

Due at 12:00 GMT, Brazils statistics agency, Instituto Brasiliero de Geografia e Estatistica, is projected to report that the Brazilian economy contracted by an annualized 0.6% in the second quarter, following a 1.9% expansion in the previous three months. On a quarterly basis, the South American developing economy likely shrank by 0.4% after growing 0.2% in the first quarter.

In a separate report, the statistics agency is expected to report at 13:30 GMT that the nations Debt-to-GDP-ratio rose to 35.0% from 34.9%. Additionally, Brazils Ministry of Finance will likely report that the nations nominal budget deficit widened to BRL 22.000 billion in July from 20.792 billion a month earlier.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 2.2455. In case USD/BRL manages to breach the first resistance level at 2.2553, it will probably continue up to test 2.2690. In case the second key resistance is broken, the pair will probably attempt to advance to 2.2788.

If USD/BRL manages to breach the first key support at 2.2318, it will probably continue to slide and test 2.2220. With this second key support broken, movement to the downside will probably continue to 2.2083.

The mid-Pivot levels for today are as follows: M1 – 2.2152, M2 – 2.2269, M3 – 2.2387, M4 – 2.2504, M5 – 2.2622, M6 – 2.2739.

In weekly terms, the central pivot point is at 2.2692. The three key resistance levels are as follows: R1 – 2.2925, R2 – 2.3071, R3 – 2.3304. The three key support levels are: S1 – 2.2546, S2 – 2.2313, S3 – 2.2167.