The spot rate broke the lower limit of its medium term bullish channel at 98.50 leading to an acceleration. A pull back to this level is expected before reaching the lower limit of its short term bearish channel at 97.60.
Technical indicators do not provide clear signals but with the failure of yesterday we can envisage a bearish movement. 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 breaking the inferior band supporting the assumption of a violent movement.
As the spot rate broke the lower limit of its channel, we recommend a sell at the level of 98.50 with the 1st objective at 97.90 and then at 97.60. A breakthrough of 98.70 will invalidate this scenario.
