The spot rate approaches the intermediate resistance of its medium-term bearish channel in 1.6010 leading to acceleration. A break of this level will allow it to reach the upper limit of its channel at 1.6070.
Technical indicators provide buy signals supporting the assumption of a break in the short term. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
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 1.6010 with the 1st objective at 1.5950 and then at 1.5930. A breakthrough of 1.6030 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 1.6010 with the 1st objective at 1.6070 and then at 1.6090. A breakthrough of 1.5990 will invalidate this scenario.
