The spot rate broke the intermediate resistance of its medium-term bearish channel in 118.40 leading to acceleration. A pullback on these levels is expected before the upper limit of its channel at 121.50 is reached.
Technical indicators provide sell signals and the rate evolves in overbuy zone supporting the assumption of a pullback in the short term. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in the short term.
The spot rate broke the intermediate resistance of its channel, we suggest 2 scenarios. The first one is the hypothesis of a pullback where we recommend a buy on the level of 118.40 with the 1st objective at 119.00 and then at 119.20. A breakthrough of 118.20 will invalidate this scenario. The second scenario is a break of its support where we recommend a “sell stop” which means to sell the spot rate as soon as it is broken through its support of 118.40 with the 1st objective at 117.80 and then at 117.60. A breakthrough of 118.60 will invalidate this scenario.
