The spot rate is presently testing the upper limit of its medium term bearish channel in 109.70 and is expected to begin a decline. However, a breakdown of these levels will reveal significant potential and result in the beginning of a bullish trend.
Technical indicators provide signals for Buy-deals but as long as the resistance is unbroken, the pair is most likely to 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 events, the market indicates a bullish opportunity as soon as the spot rate will has broken its resistance in the point 109.70 with 110.30 and 110.50 seen as first objectives. A breakdown in 109.50 will reverse this scenario.
