USD/BRL up 1% amid new proposal to close budget gap

By FXStreet FXStreet (Córdoba) – The Brazilian real is among the worst performer in the forex market on Tuesday. USD/BRL is rising 1.30% and reached 3.88. Price remain below last week highs, but continues to point toward 4.

Dilma Rousseff and the Finance Minister, Joaquim Levy proposed new spending cuts and tax increases in order to close the budget gap. Last week the real lost ground after Standard & Poor’s lowered the credit rating below the investment grade arguing the complex political situation and the fiscal outlook. The new proposals are going to face strong resistance in Congress.

USD/BRL technical levels

“A continuation of the USDBRL upside momentum will soon put in sight resistance levels at 3.8935 (Sep 11 high, but we’re almost there already), 3.9061 (Sep 10 high) and, moving further up, the psychological 4.00 handle where some investors may to start getting involved again. To the downside, levels around 3.76, 3.65 and 3.60 is where the pair would find support”, wrote analysts from TD Securities.
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Source:: FX Street