The spot rate is currently testing the intermediate support of its medium-term bullish channel at 1.2950 suggesting a rebound. However, a break of these levels will free a large potential and reach the lower limit of its channel at 1.2750.
Technical indicators provide buy signals and until the support is not broken the assumption of a rebound is most likely. Bollinger bands have stabilized showing a more regular volatility.
The spot rate is currently testing the intermediate support of its channel, we suggest 2 scenarios. The first one is the hypothesis of a rebound where we recommend a buy on the level of 1.2950 with the 1st objective at 1.3010 and then at 1.3030. A breakthrough of 1.2930 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means to sell the spot rate as soon as it has broken through its support of 1.2950 with the 1st objective at 1.2890 and then at 1.2870. A breakthrough of 1.2970 will invalidate this scenario.
