The spot rate approaches the upper limit of its long-term bearish channel at 1.6290 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators do not provide clear signals, but until the resistance is not broken the assumption of a decline is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
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 then we recommend a sell on the level of 1.6290 with the 1st objective at 1.6230 and then at 1.6210. A breakthrough of 1.6310 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 1.6290 with the 1st objective at 1.6350 and then at 1.6370. A breakthrough of 1.6270 will invalidate this scenario.
