The spot rate is currently testing the upper limit of its long-term bearish channel at 1.3280 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators do not provide clear signals but, approaching 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, so we recommend 2 scenarios: the first one is the hypothesis of a decline, then we recommend a sell on the level of 1.3280 with the 1st objective at 1.3220 and then at 1.3200. A break through 1.3300 will invalidate this scenario. The second scenario is a break of its resistance, then we recommend a “buy stop”, which means to buy the spot rate as soon as it has broken through its resistance of 1.3280 with the 1st objective at 1.3340 and then at 1.3360. A break through 1.3260 will invalidate this scenario.
