Presently the spot rate is testing the upper limit of its medium term bullish channel at 1.6220 and is likely to decline. However, a breakdown of these levels will reveal significant potential and initiate a violent bullish trend.
Technical indicators provide sellers signals but as long as the resistance remains unbroken, the pair is likely to decline. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement
According to previous events the market will provide a bullish opportunity as soon as the spot rate has broken through its resistance of 1.6220 with the 1st targets seen at 1.6280 and 1.6300 levels. In case the level1.6200 is passed through, the proposed scenario will be altered.
Albert Fitoussi is taking part in the "Analyst of the Year" award organized by MT5.com portal. If you like his article, please vote for him.