The Brazilian real remains in a major (long-term) sideways trend on its monthly chart. The first thing that jumped out at me was the real taking out its previous 4-month low of 0.17378 during December as it hit a monthly low of 0.17370. From a technical point of view this was expected to trigger another round of selling, possibly leading to a test of the major low at 0.16756 from May 2020. And while this could still happen, late December saw the real close on a bit of a rally, finishing the month at 0.17944. Again, based on the new 4-month low, I’m expecting the real to come under pressure with initial resistance at the previous 4-month high of 0.19740.
