The spot rate approaches the upper limit of its medium term bearish channel at 129.70 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators do not provide clear signals but until the resistance is not broken the assumption of a decline is most likely. Bollinger bands have stabilized showing a more regular volatility.
The spot rate is currently testing the upper limit of its channel, so we recommend 2 scenarios: the first one is the hypothesis of a decline - then we recommend to sell on the level of 129.70 with the 1st objective at 129.10 and then at 128.90 A break through 129.90 will invalidate this scenario. The second scenario is a break of its resistance - then we recommend a “buy stop” that means to buy the spot rate as soon as it has broken through its resistance of 129.70 with the 1st objective at 130.30 and then at 130.50. A break through 129.50 will invalidate this scenario.
