The spot rate is currently testing the intermediate support of its medium-term bearish channel at 100.30 suggesting a rebound. However, a break of these levels will free a large potential and reach the lower limit of its channel at 99.50.
Technical indicators provide sell signals but until the support is not broken, the assumption of a rebound 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 inferior band strengthens the intermediate supporty of the channel supporting the hypothesis of a rebound.
The spot rate is currently testing the intermediate support of its channel, we suggest 2 scenarios: the first one is the hypothesis of a rebound where we recommend a buy at the level of 100.30 with the 1st objective at 100.90 and then at 101.10. A breakthrough of 100.10 will invalidate this scenario. The second scenario is a break of its support where we recommend a “sell stop” which means selling the spot rate as soon as it is broken through its support of 100.30 with the 1st objective at 99.70 and then at 99.50. A breakthrough of 100.50 will invalidate this scenario.
