The spot rate is currently testing the intermediate resistance of its medium-term bearish channel at 1.3130 suggesting a decline. However, a break of this level will allow it to reach the upper limit of its channel at 1.3220.
Technical indicators provide buy 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.
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 1.3130 with the 1st objective at 1.3070 and then at 1.3050. A breakthrough of 1.3150 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 1.3130 with the 1st objective at 1.3190 and then at 1.3210. A breakthrough of 1.3110 will invalidate this scenario.
