The spot rate approaches the upper limit of its medium-term bearish channel at 114.80 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 are much discarded as a result of a strong decline these days. Stabilization is expected in the short term.
The spot rate is currently testing the upper limit of its trading range, we suggest 2 scenarios. The first one is the hypothesis of a decline where we recommend a sell on the level of 114.80 with the 1st objective at 114.20 and then at 114.00. A breakthrough of 115.00 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 114.80 with the 1st objective at 115.40 and then at 115.60. A breakthrough of 114.60 will invalidate this scenario.
