The spot rate is currently testing the upper limit of its medium term bearish channel in 1.5940 and seems to initiate a decline. However a break through these levels will free up significant potential and initiate a bullish trend.
Technical indicators provide sell-signals and are approaching to the overbuy zone supporting the assumptions 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 may indicate a bullish opportunity as soon as the spot rate will have broken its resistance at 1.5940 with the 1st objective of 1.6000, then 1.6020. A break in 1.5920 will invalidate this scenario.
