Forex Market: USD/BRL daily trading outlook

Yesterday’s trade saw USD/BRL within the range of 2.5090-2.4531. The pair closed at 2.4966, gaining 2.59% on a daily basis.

At 10:24 GMT today USD/BRL was down 0.01% for the day to trade at 2.4963. The pair shifted in a daily range of 2.4952-2.4971.

Fundamental view

United States

The Commerce Department’s Bureau of Economic Analysis is expected to report at 13:30 GMT that the US trade deficit probably narrowed slightly to $40.00 billion in September from $40.10 billion in August. If confirmed, this would be the lowest reading since January.

The trade balance measures the difference in value between a country’s exported and imported goods and services during the reported period. It reflects the net export of goods and services, or one of the components to form the country’s Gross Domestic Product. Generally, exports reflect economic growth, while imports indicate domestic demand. A widening trade surplus implies higher demand for the local currency. In case the trade balance deficit widened more than anticipated, this would mount selling pressure on the US dollar.

Later in the day, the US Census Bureau will report on the nation’s factory orders for September. This indicator measures the change in the total value of new purchase orders placed with manufacturers.

Orders are projected to have declined by 0.6% in September on a monthly basis, compared to a 10.1% contraction in August.

Excluding the sector of transportation, orders probably have risen by 0.1%.

In case new orders dropped more than anticipated, this would have a bearish effect on the greenback, and vice versa.

Brazil

Brazils industrial production probably contracted by an annualized 1.5% in September, according to the median forecast by experts, following a 5.4% decrease in August. If so, this would be the seventh consecutive month of contraction.

In monthly terms, industrial output probably climbed 0.2% in September, following a 0.7% expansion in August.

The index reflects the change in overall inflation-adjusted value of output at manufacturers, mines and utilities. In case industrial output shrank more than anticipated, this would have a bearish effect on the local currency. Instituto Brasileiro de Geografia e Estatística (IBGE) will release the official industrial data at 11:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 2.4862. In case USD/BRL manages to breach the first resistance level at 2.5194, it may continue up to test 2.5421. In case the second key resistance is broken, the pair could attempt to advance to 2.5753.

If USD/BRL manages to breach the first key support at 2.4635, it may come to test 2.4303. With this second key support broken, movement to the downside may continue to 2.4076.

The mid-pivot levels for today are as follows: M1 – 2.4190, M2 – 2.4469, M3 – 2.4749, M4 – 2.5028, M5 – 2.5308, M6 – 2.5587.

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.