Two months ago in my regular Monthly Report on USDBRL I pointed out ‘The resistance band was 2.6203 – 2.6290 is now crucially in need of breaking & consecutive closing over, otherwise we will be testing back down to 2.4923…’.
Well last Friday I received part two of this wish list for bulls! During most of Jan prices had weakened down through various support levels, notably 50% Fibs at 2.6275 (see above), the Dec 2008 high at 2.6203 (see above) & the 50% Fib at 2.5765! Prices eventually halted at the 2.5463 support – this is not an especially spectacular level but it is the secondary support back in Dec 2008 after the high!
Added to that the Bullish Long White Marubozo on the Weekly Chart but tempered by the big Indecisive Spinning Top on the Monthly Chart and you can see the bullish case, though not stupendous, has continued to have significant merit – we close for a second consecutive month over the important band 2.6203 – 2.6290!
So where now – well, the market will have to immediately deal with the Dec-to-date Downtrend (currently 2.6856) on Monday, this oughtn’t to be a problem but then we have resistance ahead at 2.7304 & 2.7602! Nevertheless these may be dealt with though I am not sure if it will be on the first attempt.
More interestingly I have highlighted three crossover dates to look out for more volatile action – they are 11th of Feb, 2nd of Mar & perhaps the 8th of Apr! For the moment I maintain a bullish bullet point but with a question mark!
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