Brazilian real bounces as Fed defers actions on interest policy

The Brazilian real led gains in Latin American FX markets on expectations that U.S. policymaker's action on interest but they signaled they may still take some time before raising interest rates in one of the largest economy in the world.

Bets that the Fed will acknowledge the weakness of recent economic data at the end of their two-day meeting on Wednesday sapped the dollar's strength globally, leaving it 0.7 percent weaker against a basket of major trading counterpart currencies.

On the contrary, Brazilian policymakers are seen rising sharply the country's base interest rate after markets close on Wednesday, further increasing the rate differential that make real-denominated assets more appealing to investors.

Technical and Derivatives watch:

On technical side a minor uptrend seen in intermediate medium trend. On Tuesday we saw a hammer candle pattern occurred on daily chart with RSI (14) showing positive convergence to the price curve. A hammer candle on a downtrend is a clear signal for reversal of downtrend. On the contrary intraday chart also shows a red hanging man on up-move occurred which mean earlier trend reversal is unable sustain. But please note that this is for medium term basis.
One can find shorting opportunities on futures on an intraday perspective but for medium term basis uptrend is intact.