The spot rate is currently testing the upper limit of its long-term bearish channel at 115.60 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 115.60 with the 1st objective at 115.00 and then at 114.80. A breakthrough of 115.80 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 115.60 with the 1st objective at 116.20 and then at 116.40. A breakthrough of 115.40 will invalidate this scenario.
