The USDBRL pair did a quick whipsaw after unconfirmed reports that Jair Bolsonaro, the President of Brazil, may have tested positive for the coronavirus late Monday evening. Several Brazilian news outlets, including a CNN affiliate, are reporting this after Bolsonaro was said to have developed symptoms that closely mimic that of symptomatic coronavirus infection, including a high fever. Recent cancellations of public appearances seem to lend credence to these reports.
Bolsonaro has at various times, played down the impact of the coronavirus and has at multiple times, refused to wear a mask. He has also been criticized for some infamous comments, which appeared to question the death toll in Brazil. Opponents also say he preferred keeping the economy open rather than applying strict measures to curb the spread in Brazil.
Since then Brazil’s local epidemic has run amok, causing a surge in coronavirus cases and deaths that now put it in the number 2 position among coronavirus-affected countries globally.
Outlook for USDBRL
The pair responded with an intraday whipsaw move that saw the pair surging to the intraday resistance at 5.3982, before being beaten back with a near-900 pip move. The USDBRL pair is now approaching the ascending trendline which has provided support for price from 12 June till date. If price breaks down this trendline, the USDBRL targets 5.2687, with 5.1991 being the nearest downside target from that support.
On the flip side, a bounce from this support line targets the resistance zone which has 5.3828 as the floor and 5.3983 as the ceiling. Above this level, 5.4580 remains a valid upside target, with the high of 30 June at 5.5067 coming in close as a further resistance.