Brazil’s economy has been stumbling and a widespread corruption scandal has tainted state-owned oil group Petrobras. The uncertainty has also led to a Standard & Poor’s downgrade of the country’s investment-grade rating this month.
While the central bank helped provide a good boost to the Brazilian markets last week, traders warned that the bounce may be temporary, pointing to ongoing volatility in the political environment, financials and economy.
“Turning to the 3 month continuation chart, we see several very bearish signs. Over the past 3 months, the Real has been making a series of lower highs and lower lows. The 20 day Simple Moving Average (SMA) is below the 50 day SMA and the gap between them is widening. The 20 day SMA was providing resistance and each attempt to test this level has failed. RSI is a neutral 44.18,” notes Options Express.
WisdomTree Brazilian Real ETF
