The spot rate is currently testing the intermediate resistance of its medium-term bullish channel at 106.90. It seems that a decline was initiated. However, a break of these levels will free a large potential and reach the upper limit of its channel at 108.30.
Technical indicators provide buy signals, but until the resistance is not broken the assumption of a decline is most likely. Bollinger bands have stabilized showing a more regular volatility.
The spot rate is currently testing the intermediate resistance of its channel where we suggest 2 scenarios. The first one is the hypothesis of a decline where we recommend a sell on the level of 106.90 with the 1st objective at 106.30 and then at 106.10. A breakthrough of 107.10 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means to buy the spot rate as soon as it is broken through its resistance of 106.90 with the 1st objective at 107.50 and then at 107.70. A breakthrough of 106.70 will invalidate this scenario.
