The spot rate is currently testing the upper limit of its medium-term bearish channel at 115.10 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators provide buy signals, but until the resistance is not broken the assumption of a decline is most likely. Bollinger bands have stabilized showing a more regular volatility.
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 115.10 with the 1st objective at 114.50 and then at 114.30. A breakthrough of 115.30 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 115.10 with the 1st objective at 115.70 and then at 115.90. A breakthrough of 114.90 will invalidate this scenario.
