The spot rate is currently testing the upper limit of its long-term bearish channel at 1.3320 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators do not provide clear signals. The rate approaches overbuy zone and 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 upper limit of its channel, we suggest 2 scenarios. The first one is the hypothesis of a decline where we recommend a sell on the level of 1.3320 with the 1st objective at 1.3260 and then at 1.3240. A breakthrough of 1.3340 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 1.3320 with the 1st objective at 1.3380 and then at 1.3400. A breakthrough of 1.3300 will invalidate this scenario.
