The spot rate approaches the intermediate resistance of its medium-term bullish channel at 1.3170. It seems a decline was initiated. However, a break of these levels will free a large potential and reach the upper limit of its channel at 1.3310.
Technical indicators do not provide clear signals, but 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 intermediate resistance 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 1.3170 with the 1st objective at 1.3110 and then at 1.3090. A breakthrough of 1.3190 will invalidate this scenario. The second scenario is a break of its resistance where we recommend a “buy stop” which means to buy the spot rate as soon as it is broken through its resistance of 1.3170 with the 1st objective at 1.3230 and then at 1.3250. A breakthrough of 1.3150 will invalidate this scenario.
