The spot rate is currently testing the upper limit of its medium term bulliish channel in 110.90 and is likely to start declining. However, a breakdown of these levels will reveal significant potential and initiate a bullish trend.
Technical indicators do not provide clear signals but evolvement within the overbuy zone confirms the assumption of a decline that is expected to take place soon. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
Considering the previous situation, the market indicates a bullish opportunity as soon as the spot rate will has broken its resistance in 110.90 with a 1st objectives seen at 111.50 and 111.70 levels. In case the level 110.70 is passed through, the proposed scenario will be reversed.
