EUR/BRL to extend the slide from the 7.0013 level – Commerzbank

The EUR/BRL pair has charted a key week reversal from 7.0013 which implies that 7.0013 is an interim high. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, looks for further weakness.

Key quotes

“EUR/BRL has charted a key week reversal from the 7.0013 level. Failure here has been emphatic and coupled with a 13 count and divergence of the RSI we view this as an interim turning point for the market and would allow for further losses.” 

“It has sold off sharply to the three-month uptrend and 55-day ma at 6.5730 and this is now exposed. Failure here will target the 2020-2021 support line at 6.5246 and then 200-day ma at 6.3789 and then the December low at 6.0876.” 

“Previous October highs at 6.7866 are likely to offer initial resistance now ahead of the 7.0013 high.”