Keep an eye on the Brazilian real this week

Keep an eye on the Brazilian real this week

2019-11-11 • Updated

The end of the last week was highlighted by the good news for the Brazilian market. The Brazilian president Jair Bolsonaro finally left the hospital on February 13 after the 17-day “power vacuum”. Now he is about to rule out one of the biggest issues in the Brazilian economy. Of course, we are talking about pension reform.  Let’s find out what is so special about this reform and how it may affect the Brazilian currency.

Quick preview to the pension reform

Can you imagine, that you can retire at 55 and earn 70% of your final salary for the rest of your life? Well, in Brazil it has been the normal situation for years. As a result, pension spending accounts for the third part of all government budget. It is easy to guess that this is the major reason for the huge budget deficit.


The “Operation Car Wash” investigation, which uncovered corruption at the highest levels of the Brazilian government started an era of changes in Brazil. The 2018 elections were the second significant step towards these changes. During the election campaign, the program by the far-right liberal Jair Bolsonaro got the most support by people and helped him to become the president of the country. Besides his statements on anti-corruption and gun ownership, he stressed the main point on the reformation of the pension system. It’s worth mentioning that the previous governments already tried to reform the pension system before, but faced resistance from public servants and other groups. 

After the inauguration on January 1, the market started to wait for the further steps by the president.

At first, the president and the government economic team listed the main topics to be discussed in the future pension plan. These topics included a minimum age, transition period of the reform, size of pensions and social security debts. The first two of them were the hardest to reach an agreement on.  The proposal by the economy minister Paulo Guedes suggested setting a minimum age of 65 for both men and women. However, president Jair Bolsonaro disagreed with the minimum age for women. He proposed for 60 years. As for the transition period, the president wanted it to last for 20 years, while the economic team suggested it to be twice shorter. These tensions inside the government increased the uncertainties around the final version of the reform.  As a result, these uncertainties affected the Brazilian currency.

Finally on February 15, after the long-lasting discussions, the president and the government economic team finalized the pension system reform. According to this final version, the minimum retirement age will be 65 years for men and 62 years for women and the implementation of the reform will take 12 years. Now, the final word belongs to Congress. The Brazilian president will send the draft pension proposal on February 20. If Congress approves the reform, it will boost the Brazilian real. In case of any disagreements, the BRL will fall.

Now let’s look at the key levels for Brazilian real ahead of the important event.

On the daily chart of USD/BRL, the pair has been trading sideways since the beginning of the last week. Despite the bearish pressure on February 14-15 after the approval of the reform, the trend for the pair is still bullish according to Parabolic SAR. If the pension reform proposal is welcomed by the Congress, the pair will fall towards the support at 3.6679. If  bears are strong enough, they will pull the pair lower to the next support at 3.6359.

But let’s not forget about the economic events for the USD. February 20 is also the date of the FOMC meeting minutes’ release at 21:00 MT time. What if the Fed decides to provide hawkish hints on its monetary policy? In that case, we may expect USD/BRL to rise. For now, the pair is testing the resistance at 3.7311. If the USD strengthens or the pension reform is not approved, this level will be broken and the next resistance will be placed at 3.7631.



Since the election of Jair Bolsonaro as the new president of Brazil, the Brazilian real has been named as one of the strongest emerging market currencies. Let’s see how long the positive dynamics for the currency will last.


OPEC Boosts The Oil Market
OPEC Boosts The Oil Market

Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.

How Will China’s Regulation Affect Oil?
How Will China’s Regulation Affect Oil?

China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.

The Oil Market in the Month of June
The Oil Market in the Month of June

Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.

Latest news

Is Bitcoin Set to Drop?
Is Bitcoin Set to Drop?

Bitcoin's price remains stagnant despite the Fed's slightly less hawkish tone. In contrast, Bitcoin has outperformed other assets, doubling in price from $16K to nearly $38K this year. Improved fundamentals, including the resolution of Binance concerns...

Top Three Trade Ideas for December 2023
Top Three Trade Ideas for December 2023

Hey folks, it’s a wrap to yet another month in the 2023 calendar, and I’m guessing you know what that means - time for another episode in the “What To Trade” series. For December, I will be mapping out trade more cautiously as the market volatility often drops

Gold Breaks To New Highs. What Is Expected In December?
Gold Breaks To New Highs. What Is Expected In December?

Gold prices, reaching the highest since May 5, are consolidating as traders await the US PCE Price Index, a key inflation indicator. The upcoming data could impact the Fed's policy, influencing the demand for the US Dollar and providing direction for gold. The Greenback sees some repositioning, recovering modestly ahead of the data risk.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera