The spot rate is currently testing the intermediate resistance of its medium term bullish channel at 100.80 and seems to initiate a decline. However, a break of these levels will free a large potential and reach the upper limit of its channel at 101.40.
Technical indicators provide sell signals but until the resistance is not broken, the assumption 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 superior band strengthens the intermediate resistance of the channel supporting the hypothesis of a decline.
The spot rate is currently testing the intermediate resistance of its channel, we suggest 2 scenarios: the first one is the hypothesis of a decline where we recommend a sell at the level of 100.80 with the 1st objective at 100.20 and then at 100.00. A breakthrough of 101.00 will invalidate this scenario. The second scenario is a break of its resistance then we advice a “buy stop” which means buying the spot rate as soon as it is broken through its resistance of 100.80 with the 1st objective at 101.40 and then at 101.60. A breakthrough of 100.60 will invalidate this scenario.
