The spot rate approaches the lower limit of its medium term bullish channel at 1.6120 suggesting a rebound. However, a break of these levels will free a large potential and initiate a violent bearish channel.
Technical indicators provide buy 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 decline these days. Stabilization is expected in a short term.
The spot rate approaches the lower limit of its channel, so we recommend 2 scenarios: the first one is the hypothesis of a rebound, then we recommend to buy at the level of 1.6120 with the 1st objective at 1.6180 and then at 1.6200. A break through 1.6100 will invalidate this scenario. The second scenario is a break of its support, then we recommend a “sell stop”, which means to sell the spot rate as soon as it has broken through its support of 1.6120 with the 1st objective at 1.6060 and then at 1.6040. A break through 1.6140 will invalidate this scenario.
