Brazil Real May Rally 10% to 10-Year High: Technical Analysis

Nov. 11 (Bloomberg) -- Brazil’s real, the best-performing major currency in the world this year, may rally 10 percent to a 10-year high because government measures aren’t enough to stem gains, said Phil Roberts, a technical analyst at Barclays Plc.

The real will take out a decade high of 1.5545 per dollar reached in August 2008, a month before global credit markets seized up, Roberts said. He said that should the real begin to falter and decline to 1.7810 per dollar, it would signal that the rally that began in March would be ending.

The real has climbed 35 percent this year, more than all currencies Bloomberg tracks against the dollar after the Seychelles rupee. The real weakened 0.3 percent today to 1.7175 per dollar at 11:16 a.m. in New York.

This rally is “not over,” Roberts said in an interview from London. “Attempts to stop the appreciation of the real will have to be stronger.” ....

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To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net
Last Updated: November 11, 2009 11:32 EST