The spot rate is currently testing the upper limit of its medium-term bearish channel at 1.3030 suggesting a decline. However, a break of these levels will initiate a bullish channel.
Technical indicators do not provide clear signals but evolves in overbuy zone and until the resistance is not broken the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in the short term. Furthermore, the superior band strengthens the upper limit of its channel supporting the hypothesis of a decline.
The spot rate is currently testing the upper limit of its channel, we suggest 2 scenarios: the first one is the hypothesis of a decline where we recommend a sell on the level of 1.3030 with the 1st objective at 1.2970 and then at 1.2950. A breakthrough of 1.3050 will invalidate this scenario. The second scenario is a break of its resistance where we recommend a “buy stop” which means to buy the spot rate as soon as it is broken through its resistance of 1.3030 with the 1st objective at 1.3090 and then at 1.3110. A breakthrough of 1.3010 will invalidate this scenario.
