The spot rate is currently testing the intermediate resistance of its medium term bearish channel at 1.3500 suggesting a decline. However, a break of these levels will allow it to reach the upper limit of its channel at 1.3560.
Technical indicators do not provide clear 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.
As the spot rate is currently testing the intermediate resistance of its channel, we recommend 2 scenarios: the first one is the hypothesis of a decline where we recommend a sell at the level of 1.3500 with the 1st objective at 1.3440 and then at 1.3420. A break through 1.3520 will invalidate this scenario. The second scenario is a break of its resistance where we suggest a “buy stop” which means buying the spot rate as soon as it has broken through its resistance of 1.3500 with the 1st objective at 1.3560 and then at 1.3580. A break through 1.3480 will invalidate this scenario.
