USD/BRL: Break below 4.75 can lead to extension in the phase of downtrend – SocGen

USD/BRL is probing 4.75. Economists at Société Générale analyze the pair’s technical outlook.

Failure to reclaim 5.01 could lead to persistent decline

USD/BRL violated the lower limit of the consolidation that took shape last July and March resulting in a steady downtrend. It has recently achieved downside projections of 4.75. This is interim support.  

An initial bounce is likely. However, it would be interesting to see if the pair can reclaim the lower band of previous range near 5.01. Failure could lead to persistence in decline.  

Break below 4.75 can lead to extension in the phase of downtrend towards next potential objectives at 4.69 and April 2022 lows of 4.61/4.59.