The spot rate is currently testing the intermediate support of its medium-term bullish channel at 106.50 suggesting a rebound. However, a break of these levels will free a large potential and reach the lower limit of its channel at 105.90.
Technical indicators provide sell signals and until the support is not broken the assumption of a rebound is most likely. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in the short term.
The spot rate is currently testing the intermediate support of its channel, we suggest 2 scenarios. The first one is the hypothesis of a rebound where we recommend a buy on the level of 106.50 with the 1st objective at 107.10 and then at 107.30. A breakthrough of 106.30 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means to sell the spot rate as soon as it is broken through its support of 106.50 with the 1st objective at 105.90 and then at 105.70. A breakthrough of 106.70 will invalidate this scenario.
