The spot rate approaches the intermediate resistance of its medium-term bearish channel in 117.80 leading to acceleration. A pullback on these levels is expected before the upper limit of its channel at 118.40 is reached.
Technical indicators do not provide clear signals, but the rate evolves in oversell zone supporting the assumption of a break in the short term. Bollinger bands are much discarded as a result of a strong decline 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 117.80 with the 1st objective at 118.40 and then at 119.00. A breakthrough of 117.60 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means to sell the spot rate as soon as it is broken through its support of 117.80 with the 1st objective at 117.20 and then at 117.00. A breakthrough of 118.00 will invalidate this scenario.
