The spot rate is actually testing the upper limit of its short term bearish channel at 98.80 suggesting a decline. However, a break of this level will free a large potential and initiate violent bullish channel.
Technical indicators do not provide clear signals but until the resistance is not broken, the hypothesis of a decline is most likely. Bollinger bands are much discarded as a result of a strong increase of these days. Stabilization is expected in a short term.
As the spot rate tests the upper limit of its channel, we recommend 2 scenarios: the first one is the hypothesis of a decline where we suggest a sell on the level of 98.80 with the 1st objective at 98.20 and then at 98.00. A breakthrough of 99.00 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means buying the spot rate as soon as it is broken through its resistance of 98.80 with the 1st objective at 99.40 and then at 99.60. A breakthrough of 98.60 will invalidate this scenario.
