The spot rate approaches the upper limit of its medium-term bullish channel at 129.40 suggesting a decline. However, a break of this level will initiate a more violent bullish channel.
Technical indicators provide sell signals and until the resistance is not broken the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in the short term.
The spot rate is currently testing the upper limit 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 129.40 with the 1st objective at 128.80 and then at 128.60. A breakthrough of 129.60 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 129.40 with the 1st objective at 130.00 and then at 130.20. A breakthrough of 129.20 will invalidate this scenario.
