The spot rate is currently testing the upper limit of its medium-term trading range at 1.3310 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators provide sell signals but the pair 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 trading range, we suggest 2 scenarios. The first one is the hypothesis of a decline where we recommend a sell on the level of 1.3310 with the 1st objective at 1.3250 and then at 1.3230. A breakthrough of 1.3330 will invalidate this scenario. The second scenario is a break of its resistance where we recommend a “buy stop” which means to buy the spot rate as soon as it is broken through its resistance of 1.3310 with the 1st objective at 1.3370 and then at 1.3390. A breakthrough of 1.3290 will invalidate this scenario.
