The spot rate is currently testing the upper limit of its medium-term bullish channel at 101.80 suggesting a decline. However, a break of these levels will free a large potential and initiate a more violent bullish channel.
Technical indicators provide sell signals supporting the assumption of a decline in a short term. Bollinger bands have stabilized showing a more regular volatility. Furthermore, the superior band evolves on the level of the spot rate supporting the hypothesis of a violent movement in case of failure.
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 101.80 with the 1st objective at 101.20 and then at 101.00. A breakthrough of 102.00 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 101.80 with the 1st objective at 102.40 and then at 102.60. A breakthrough of 101.60 will invalidate this scenario.