The spot rate is currently testing the upper limit of its medium term bearish channel at 1.3490 and seems to initiate a decline. However a break of these levels will free up significant potential and initiate a bullish trend.
Technical indicators provide sell-signals and are approaching the overbuy zone supporting the assumption of a decline. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
According to previous events, the market will indicate a bullish opportunity as soon as the spot rate has broken its resistance at 1.3490 with the 1st objective of 1.3550, then 1.3580. A break through 1.3470 will invalidate this scenario.
