Brésil : Technical profile improving (RIO) – 07/08/17

We integrate RIO (Brazil) into our watchlist because of a technical profile that has clearly improved and once again became attractive from a technical point of view in the short and long term. Brazil has suffered a new political scandal, but President Tremer succeeded in preventing the opposition from obtaining the two-thirds majority needed to bring the corruption charge to the Supreme Court. Therefore the case is closed and the status quo -a positive for markets- should prevail until the next election. The Brazilian economy is emerging from recession. After eight consecutive quarters of decline, the year 2017 opened with a yoy growth of 1% in Q117 GDP, which is encouraging. The decline of the dollar and the FED’s cautious approach on hiking are positive for capital inflows to Brazil. The technical configuration is interesting both on the monthly chart, which shows a recovery with prices coming back above the moving averages but also at the weekly level while a positive crossover of the MACD and EMA 13x26 could occur simultaneously which would give a clear bullish signal.

RIO : monthly data

RIO : weekly data