The spot rate is currently testing the lower limit of its medium-term bullish channel at 121.80 suggesting a rebound. However, a break of this level will free a large potential and initiate a violent bearish channel.
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 lower limit 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 121.80 with the 1st objective at 122.40 and then at 122.60. A breakthrough of 121.60 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 121.80 with the 1st objective at 121.20 and then at 121.00. A breakthrough of 122.00 will invalidate this scenario.
