
Fabrizio Peralta’s header in the final seconds of the first half was enough to give Paraguay, who last competed at the Olympics in 2004, an unexpected victory.
Brazil’s teenage prodigy Endrick, who will join Real Madrid later this year, squandered a chance to put the 2020 Tokyo Games gold medallists ahead when he missed a penalty after 29 minutes.
Brazil will next face hosts Venezuela, who beat them 3-1 in the preliminary stage earlier this month, on Thursday. Paraguay’s next fixture will be against Argentina.
The four countries face each other in the February 5-11 finals, with the two top teams securing Olympic berths.