The spot rate is currently testing the intermediate support of its medium-term bullish channel at 101.00 suggesting a rebound. However, a break of these levels will enable the lower limit of its channel at 99.00.
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.
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 101.00 with the 1st objective at 101.60 and then at 101.80. A breakthrough of 100.80 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means selling the spot rate as soon as it is broken through its support of 101.00 with the 1st objective at 100.40 and then at 100.20. A breakthrough of 101.20 will invalidate this scenario.
