The spot rate bounced off to the lower limit of its medium term bullish channel at 95.80 and approaches now to the intermediate resistance of this one at 97.50 suggesting a decline. However, a break through these levels will release good potential and reach the upper limit of this one to 98.60.
Technical indicators provide buy signals but approach overbuy zone supporting the assumption of a decline. Nevertheless, until the resistance is not broken, the hypothesis of a decline is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement. Furthermore, the spot rate is currently breaking the superior band suggesting acceleration in short term.
We recommend to buy the spot rate as soon as is broken through its resistance of 97.50 with the 1st objective at 98.10 and then at 98.60. A breakthrough 97.30 will invalidate this scenario.
