The spot rate approaches the lower limit of its medium-term bullish channel at 1.5290 suggesting a rebound. However, a break of this level will free a large potential and initiate a violent bearish channel.
Technical indicators do not provide clear signals, but until the support is not broken the assumption of a rebound is most likely. Bollinger bands have stabilized showing a more regular volatility.
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 then we recommend a buy on the level of 1.5290 with the 1st objective at 1.5350 and then at 1.5370. A breakthrough of 1.5270 will invalidate this scenario. The second scenario is a break of its support where we recommend a “sell stop” which means to sell the spot rate as soon as it is broken through its support of 1.5290 with the 1st objective at 1.5230 and then at 1.5210. A breakthrough of 1.5310 will invalidate this scenario.
