The spot rate is currently testing the intermediate resistance of its medium-term bearish channel at 121.80 suggesting a decline. However, a break of this level will allow it to reach the upper limit of its channel at 123.30.
Technical indicators provide sell signals, but until the resistance is not broken the assumption of a decline is most likely. 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 121.80 with the 1st objective at 121.20 and then at 121.00. A breakthrough of 122.00 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means to buy the spot rate as soon as it is broken through its resistance of 121.80 with the 1st objective at 122.40 and then at 122.60. A breakthrough of 121.60 will invalidate this scenario.
