The spot rate has bounced off the lower limit of its medium term bearish channel at 1.5490 and is testing now the upper limit of this one at 1.5660. A breakthrough this level will release a good potential and initiate a violent bullish trend.
Technical indicators do not provide clears signals but are approach overbuy zone supporting the assumption of a decline. Moreover, this resistance represents a rebound of 62% of the decline which was registered between July 27th and August 02th.
A decline is expected in the short term but most probable and less risky scenario is a break of this resistance. Taking this into account, we recommend making a "buy stop" and buy when the spot rate will break its resistance at 1.5660 with a target of 1.5720.
