Last month I kept the mildly bullish incentive and stated ‘If it does rally further, what would be important to the market? Well, you have to look at the recent 50% Fib as key at 3.0988, nothing major is going to happen until that is taken out! Then realistically, the 3.2875 & 3.3167 highs! ‘.
The first part turned out to be just about right! USD/BRL rallied immediately following my report but failed at 3.0988 & then drifted lower to sideways until the 22nd of May when they tried once again on the upside but taking four days to get the two consecutive closes over the necessary 3.0988 level. The 22nd was also coincident as you can see circled above with a Tine crossover along with a previous high, usually a sign that the day may be significant in trading.We have an additional Tine crossover with another previous high in the future on the 17th of Jun, so it is worth looking at the action in that period as well!
On the downside I also made a comment last time ‘Downside, the Medium MA still rules so look to that as a last chance but the 50% Fib at 2.9330 is also important on a closing basis!’. The Medium MA is currently 2.9618 & rising.
One final comment – the Monthly Chart has a Bullish Matching pattern, though I usually do not place as much significance in these longer term charts for such a relatively short term (for them) as the next month’s commentary, it does prompt me further to keep the mildly bullish bullet point above the same.
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