The spot rate is currently testing the intermediate support of its medium-term bearish channel at 1.2870 suggesting a rebound. However, a break of this level will free a large potential and reach the lower limit of its channel at 1.2740.
Technical indicators provide buy signals and until the support is not broken the assumption of a rebound is most likely. Bollinger bands are much discarded as a result of a strong decline these days. Stabilization is expected in the short term.
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 1.2870 with the 1st objective at 1.2930 and then at 1.2950. A breakthrough of 1.2850 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 1.2870 with the 1st objective at 1.2810 and then at 1.2790. A breakthrough of 1.2890 will invalidate this scenario.
