The spot rate broke yesterday the intermediate resistance of its medium term bullish channel at 101.40 and tests now the upper limit of this one at 103.20 suggesting a decline. However, a break of these levels will initiate a more violent bullish channel.

Technical indicators provide sell signals and evolve in overbuy zone supporting the assumption of a decline in a short-term. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in a short-term.

As 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 at the level of 103.20 with the 1st objective at 102.60 and then at 102.40. A breakthrough of 103.40 will invalidate this scenario. The second scenario is a break of its resistance where we recommend a “buy stop” which means buying the spot rate as soon as it is broken through its resistance of 103.20 with the 1st objective at 103.80 and then at 104.00. A breakthrough of 103.00 will invalidate this scenario.