The spot rate is currently testing the upper limit of its long-term bearish channel at 116.10 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators provide buy signals but the rate evolves in overbuy zone, and until the resistance is not broken the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in the short term.
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 116.10 with the 1st objective at 115.50 and then at 115.30. A breakthrough of 116.30 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 116.10 with the 1st objective at 116.70 and then at 116.90. A breakthrough of 115.90 will invalidate this scenario.
