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The spot rate is currently testing the intermediate support of its medium term bearish channel at 1.3150 suggesting a rebound. However, a break of these levels will entail a decline to the lower limit of this one to 1.2940.
Technical indicators provide sell-signals but are approaching the oversell zone supporting the assumptions of a rebound. 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 bearish opportunity as soon as the spot rate has broken its support at 1.3150 with the 1st objective of 1.3090, then 1.3070. A break through 1.3170 will invalidate this scenario.
