The spot rate approaches the intermediate resistance of its medium-term bearish channel at 103.30. It seems that a decline was initiated. However, a break of these levels will free a large potential and reach the upper limit of its channel at 104.20.
Technical indicators provide sell signals, and 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.
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 on the level of 103.30 with the 1st objective at 102.70 and then at 102.50. A breakthrough of 103.50 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means to buy the spot rate as soon as it is broken through its resistance of 103.30 with the 1st objective at 103.90 and then at 104.20. A breakthrough of 103.10 will invalidate this scenario.
