The spot rate approaches the lower limit of its medium term bearish channel at 1.5210 suggesting a rebound. However, a break of these levels will free a large potential and initiate a more 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 have stabilized showing a more regular volatility.
The spot rate is currently testing the lower limit of its channel, so we suggest 2 scenarios: The first one is the hypothesis of a rebound - then we recommend a buy on the level of 1.5210 with the 1st objective at 1.5270 and then at 1.5290. A break through 1.5190 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 1.5210 with the 1st objective at 1.5150 and then at 1.5130. A break through 1.5230 will invalidate this scenario.
