The spot rate is currently testing the upper limit of its long-term bearish channel at 1.6050 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators provide sell signals and, until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
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 1.6050 with the 1st objective at 1.5990 and then at 1.5970. A break through 1.6070 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 breaks through its resistance of 1.6050 with the 1st objective at 1.6110 and then at 1.6130. A break through 1.6030 will invalidate this scenario.
