Monday’s trade saw USD/BRL within the range of 2.2474 and 2.2295 the lowest since July 29th. The pair closed at 2.2458, adding 0.41% on a daily basis.
At 9:34 GMT today USD/BRL was down 0.01% for the day to trade at 2.2462, having shifted in a daily range between 2.2460 and 2.2464.
Fundamental view
United States
Activity in United States’ manufacturing sector probably continued to expand during August, with the corresponding ISM manufacturing PMI expected to come in at a reading of 56.8, according to expectations, from 57.1 in July. If confirmed, this would be the fifteenth straight month of factory growth.
The Institute of Supply Management releases its Manufacturing Report on Business each month, giving a complete overview of the country’s manufacturing sector. It is based on five main indicators with different weight: New Orders, Production, Employment, Supplier Deliveries and Inventories.
The Institute of Supply Management conducts a survey among the executives of more than 400 industrial companies, which are asked to share their opinion regarding the economic conditions in which they operate. Rising readings, and especially better-than-expected ones, are bullish for the US dollar, and vice versa.
At 13:45, Markit Economics will report separately on US factory growth during August. According to preliminary estimates, the respective Manufacturing PMI is expected to confirm the preliminary reading of 58.0, released on August 21st, marking a considerable acceleration of growth compared to July’s 55.8. If confirmed, this would be the highest pace of expansion since April 2010, rebounding from July’s three-month low.
Brazil
Brazils statistics agency (Instituto Brasiliero de Geografia e Estatistica) is expected to report that industrial production rebounded in July, albeit remaining in the contraction zone on an annual basis.
Month-on-month, industrial output is projected to have risen by 0.5% after declining by 1.4% in June and 0.8% in May. If confirmed, this would be the first month of expansion since December.
On an annual basis, Brazils industrial sector is expected to have contracted at a slower rate, with the corresponding indicator projected to come in at -3.7% from -6.9% in June. If confirmed, this would be the fifth straight monthly contraction.
The industrial production index reflects the change in overall inflation-adjusted value of output in the manufacturing, mining and utilities sectors. In case industrial output expanded more than anticipated (or contracted less than expected) this would have a bullish effect on the local currency. The official report is to be released at 12:00 GMT.
Technical view
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 2.2409. In case USD/BRL manages to breach the first resistance level at 2.2523, it will probably continue up to test 2.2588. In case the second key resistance is broken, the pair will probably attempt to advance to 2.2702.
If USD/BRL manages to breach the first key support at 2.2344, it will probably continue to slide and test 2.2230. With this second key support broken, movement to the downside will probably continue to 2.2165.
The mid-Pivot levels for today are as follows: M1 – 2.2198, M2 – 2.2287, M3 – 2.2377, M4 – 2.2466, M5 – 2.2556, M6 – 2.2645.
In weekly terms, the central pivot point is at 2.2530. The three key resistance levels are as follows: R1 – 2.2735, R2 – 2.3109, R3 – 2.3314. The three key support levels are: S1 – 2.2156, S2 – 2.1951, S3 – 2.1577.