The spot rate is currently testing the intermediate support of its medium-term bearish channel at 1.5630 suggesting a rebound. However, a break of these levels will free a large potential and reach the lower limit of its channel at 1.5550.
Technical indicators do not provide clear signals, but the rate approaches oversell zone and until the support is not broken the assumption of a rebound is most likely. Bollinger bands have stabilized showing a more regular volatility.
The spot rate is currently testing the intermediate support of its channel, we suggest 2 scenarios. The first one is the hypothesis of a rebound where we recommend a buy on the level of 1.5630 with the 1st objective at 1.5690 and then at 1.5710. A breakthrough of 1.5610 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 1.5630 with the 1st objective at 1.5570 and then at 1.5550. A breakthrough of 1.5650 will invalidate this scenario.
