At the moment the spot rate is testing the upper limit of its medium term bearish channel in 1.0540 and is expected to initiate a decline. However, if these levels are passed through, the released potential will initiate a bullish trend.
Technical indicators provide signals for Buy-deals and approaching the overbuy zone confirms a possible decline. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
Proceeding from the previous situation, the market indicates a bullish opportunity as soon as the spot rate will has broken its resistance in 1.0540 with 1.0600 and 1.0620 seen as first objectives. A breakdown in 1.0520 will invalidate this scenario.
