The spot rate approaches the lower limit of its medium term bulish channel at 1.3060 suggesting a rebound. However, a break of these levels 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, then we recommend 2 scenarios: The first one is the hypothesis of a rebound - then we recommend a buy on the level of 1.3060 with the 1st objective at 1.3120 and then at 1.3140. A break through 1.3040 will invalidate this scenario. The second scenario is a break of its support - then we recommend a “sell stop” that means to sell the spot rate as soon as it has broken through its support of 1.3060 with the 1st objective at 1.3000 and then at 1.2980. A break through 1.3080 will invalidate this scenario.
