The Brazilian real has stopped falling, for now. USD/BRL traded near 5.51 on Monday, November 9. Two weeks earlier the pair stood at 4.98. It peaked at 5.6056 intraday on October 26. The trigger was Luiz Inácio Lula da Silva's re-election on October 25. He took 51.79% of the runoff vote against Flávio Bolsonaro's 48.21%, catching a market positioned the other way. The pair has now printed a golden cross, its 50-day moving average crossing above the 200-day average. That cross trails the move by two weeks. It still changes how trend-following desks treat the pair from here.
From the October 23 close of 4.9777, the dollar gained 12.6% against the real by the October 26 peak. In the real's terms, that is an 11.2% fall. Stocks fell with the currency. The Ibovespa dropped 13.88% on October 26. The iShares MSCI Brazil ETF lost 19.8% in a single session. Trading in São Paulo hit a circuit breaker after the Bovespa opened 10% lower. Brazil's 10-year government bond yield jumped to its highest in more than a decade. The selling came from fiscal doubt. Investors had priced a Bolsonaro win built on tighter budgets and lower corporate taxes. Lula's platform points the other way, with more state spending and tighter regulation. Markets still do not know who will run the Finance Ministry. The most-cited name, Rafael Fonteles, governor of Piauí, has yet to be confirmed in the job. Jerson Zanlorenzi, head of equities and derivatives trading at BTG Pactual, called the result "a tsunami that will hit all Brazilian assets."
The market had bet the other way. Bolsonaro led the first round on October 4 and entered the runoff as the favourite. Lula's 51.79% broke that trade in a single session.
The dollar did the rest of the work. Friday's US jobs report showed 165,000 new payrolls in October, with unemployment at 4.1%. December Fed hike odds stood at 78% as of November 8. The dollar index closed Friday at 102.26, up 0.77% on the day, and held just above 102.00 on Monday morning. Against that backdrop the real's bounce looks thin. The pair pulled back to 5.3102 from the 5.6056 peak, a 5.3% retreat, then clawed back to 5.51. That rebound recovered 68.9% of the pullback.
Why it matters
Brazil is Latin America's largest economy. A 12.6% currency move in two weeks reaches far past its own borders, into emerging-market funds, commodity exporters and every desk that trades the real against the dollar. A golden cross is a lagging signal, not a forecast: the averages only crossed after the pair had already run. Even so, it tells trend followers the medium-term direction has flipped. That changes the flow around each test of 5.60. The tension sits in the gap between the chart and the banks. Commerzbank sees the pair back at 5.20 by year-end if Brazil produces a credible fiscal plan. The median target across 18 banks is 5.10, which is 7.5% below the current 5.51. BNP Paribas is the outlier at the top with 5.70. Monday's wider dollar picture backs the pair's strength for now. The dollar index held above 102.00 after the jobs beat, the euro stood at 1.1199 and the pound at 1.3410 in MarketRadar's snapshot, and the Bank of England's hike to 4.00% keeps rate gaps in the dollar's favour.
| Level | Price | What it marks |
|---|---|---|
| Resistance | 5.60 | October 26 intraday peak |
| Resistance | 5.2261 | Highest point of June, August and September |
| Support | 5.3102 | Pullback low after the peak |
| Support | 5.10 | Double-bottom neckline; bank median year-end target |
| Support | 4.96 | October 26 double-bottom low |
What to watch
- US CPI lands Tuesday, November 10, at 8:30 AM ET, with consensus at 0.3% headline and 0.2% core month over month. The report carries no year-over-year figure for most indexes, because October 2025 prices were never collected during the shutdown.
- 5.60 test: the peak sits 1.6% above current levels, and a daily close above it would put the pair into open ground.
- 5.3102 floor: a break below it opens the 5.22 reversal target named in the technical read.
- Bolsonaro has refused to concede and is challenging the result in court, despite the Superior Electoral Court confirming the outcome.
- Finance Minister naming: any announcement would answer the fiscal question driving the whole move.
Key points
- Lula won the October 25 runoff 51.79% to 48.21% over Flávio Bolsonaro, taking a fourth term.
- USD/BRL ran from 4.9777 to 5.6056, a 12.6% rise in the pair and an 11.2% fall in the real.
- Golden cross printed: the 50-day moving average now sits above the 200-day average.
- Ibovespa fell 13.88% on October 26; the Brazil ETF lost 19.8% in one session.
- Near 5.51 now, the pair faces resistance at 5.60 and 5.2261, with support at 5.3102, 5.10 and 4.96.
- Banks see 5.10 by year-end on median, 7.5% below spot, while BNP Paribas sits at 5.70.
- US CPI arrives Tuesday at 8:30 AM ET, with 0.3% headline and 0.2% core expected.
MarketRadar take
The cross confirms a trend change that already happened. The pair ran 12.6% before the averages crossed, so the signal is a stamp on the move rather than an early call. Two numbers frame the next leg. A close above 5.60, 1.6% away, would clear the October 26 peak and leave the pair without a nearby ceiling. A drop through 5.3102 would hand it back toward 5.22 and give the bank consensus, which sees 5.10 by year-end, its first foothold. The double-bottom math already printed. The 5.10 neckline minus the 4.96 low gives a 0.14 measured move, a 5.24 target that sits almost exactly on the 5.2261 breakout level the pair cleared on the way up. Tuesday's CPI decides which side gets the next push. A soft core print is the one outcome that would take pressure off the dollar and give the real room to breathe.
