The spot rate approaches the lower limit of its medium-term bullish channel at 114.10 suggesting a rebound. However, a break of these levels will free a large potential and initiate a violent bearish channel.
Technical indicators provide buy signals and, until the support is not broken, the assumption of a rebound 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 lower limit of its channel, so we recommend 2 scenarios: the first one is the hypothesis of a rebound, then we recommend a buy at the level of 114.10 with the 1st objective at 114.70 and then at 114.90. A break through 113.90 will invalidate this scenario. The second scenario is a break of its support, then we recommend a sell stop, which means to sell the spot rate as soon as it breaks through its support of 114.10 with the 1st objective at 113.50 and then at 113.30. A break through 114.30 will invalidate this scenario.
