A few weeks ago on the “Strategie Valutarie” pages, we pointed out the "high" probability that the Brazilian Real goes on in its strengthening march at least until the end of May, when the influence of the bottom cycle at 145/150 days should push UsdBrl again upwards. This direction has also given a good reason to invest (or remain invested) on the Bovespa stock index, usually positively correlated to the strength of the Real.
The rebound of the Bovespa that has newly reached 50.000 points is spectacular, but now comes the hard part. In fact, even if it seems there is a window of a few months in favor of the Real, the moving averages that have accompanied the rise of UsdBrl from 2011, should now prevent a further drop below 2.20. We can not exclude an illusory bearish break until 2.14 , but at that point a take profit on the Brazilian currency and the stock market would seem the best choice to be taken (Chart source: Bloomberg ).
The rebound of the Bovespa that has newly reached 50.000 points is spectacular, but now comes the hard part. In fact, even if it seems there is a window of a few months in favor of the Real, the moving averages that have accompanied the rise of UsdBrl from 2011, should now prevent a further drop below 2.20. We can not exclude an illusory bearish break until 2.14 , but at that point a take profit on the Brazilian currency and the stock market would seem the best choice to be taken (Chart source: Bloomberg ).
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