The major (long-term) trend of the Brazilian real (BRLUSD) remains sideways, with support at the low of 0.16756 (May 2020) and resistance 0.20739 (June 2020). As we start February, immediate resistance is the previous 4-month high of 0.18914 posted late in January, increasing the likelihood this line is taken out early in the month.

In mid January, news was of Brazil’s inflation rate for 2021 coming in greater than 10%, a new 6-year high. According to a Reuters story, the “surge in inflation pushed Brazil’s central bank into one of the most aggressive rate hike cycles in the world last year, raising its benchmark interest rate to 9.25% in December from 2% in March.” More hikes are expected in 2022, with the real starting to react to the moves.