The spot rate approaches the upper limit of its medium-term bearish channel at 1.6140 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators provide sell signals, 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.
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 1.6140 with the 1st objective at 1.6080 and then at 1.6060. A breakthrough of 1.6160 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 1.6140 with the 1st objective at 1.6200 and then at 1.6220. A breakthrough of 1.6120 will invalidate this scenario.