Since yesterday the spot rate is testing the intermediate resistance of its medium term bullish channel at 1.5650 and seems to initiate a decline. The aftereffects of bad macro news from Great Britain could validate this hypothesis. As well the spot rate could return to the lower limit of its channel to 1.5580.
Technical indicators do not provide clears signals but until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands have stabilized showing a more regular volatility and holding near the same levels as the upper limit and lower limit of the channel supporting the hypothesis of a violent movement in case of exit.
The spot rate is at its resistance that is why we recommend 2 scenarios: the first one is to buy the spot rate as soon as it is broken through its resistance of 1.5650 with the 1st objective at 1.5710 and then at 1.5730. A breakthrough 1.5630 will invalidate this scenario. The second one is to sell the spot rate on the level of 1.5650 with the 1st objective at 1.5590 and then at 1.5570. A breakthrought 1.5670 will invalidate this scenario.
