Forex Market: USD/BRL daily trading forecast

Friday’s trade saw USD/BRL within the range of 2.4788-2.3975. The pair closed at 2.4783, gaining 3.11% on a daily basis.

At 9:19 GMT today USD/BRL was up 0.02% for the day to trade at 2.4785. The pair shifted in a daily range of 2.4335-2.4787.

Fundamental view

United States

Markit Economics will likely report that factory output in the US expanded at a solid pace in October, but slower from a month earlier. The respective Manufacturing PMI is expected to confirm a preliminary reading of 56.2, trailing September’s final reading of 57.5.

Meanwhile, the Institute for Supply Management, whose manufacturing report is more widely tracked, is anticipated to report that manufacturing activity growth in the US remained robust, but it slowed down for the second consecutive month. The ISM Manufacturing PMI is poised to come in at 56.2 from 56.6 in September, registering the 17th straight month of expansion.

The report is also expected to show that the manufacturing employment subindex inched up to 54.8 from 54.6 a month earlier, complementing recent upbeat labor data from the US.

Brazil

HSBC, in collaboration with Markit Economics is expected to report that factory output in Brazil returned to growth in October, with the respective HSBC Manufacturing PMI projected to come in at 50.8 compared to 49.3 in September.

Later in the day, Brazils Ministry of Development, Industry and Foreign Trade (Ministério do Desenvolvimento, Indústria e Comércio Exterior) is expected to report that the nations trade balance swung to a surplus of $0.2 billion in October, compared to a $0.94-billion deficit in September. Generally speaking, a larger-than-expected trade surplus is seen as bullish for the local currency, and vice versa.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 2.4515. In case USD/BRL manages to breach the first resistance level at 2.5056, it will probably continue up to test 2.5328. In case the second key resistance is broken, the pair will probably attempt to advance to 2.5869.

If USD/BRL manages to breach the first key support at 2.4243, it may come to test 2.3702. With this second key support broken, movement to the downside may continue to 2.3430.

The mid-Pivot levels for today are as follows: M1 – 2.3566, M2 – 2.3973, M3 – 2.4379, M4 – 2.4786, M5 – 2.5192, M6 – 2.5599.

In weekly terms, the central pivot point is at 2.4769. The three key resistance levels are as follows: R1 – 2.5612, R2 – 2.6440, R3 – 2.7283. The three key support levels are: S1 – 2.3941, S2 – 2.3098, S3 – 2.2270.