The spot rate approaches the intermediate resistance of its medium-term bullish channel at 104.60. It seems that a decline was initiated. However, a break of these levels will free a large potential and reach the upper limit of its channel at 105.60.
Technical indicators do not provide clear 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 104.60 with the 1st objective at 104.00 and then at 103.80. A breakthrough of 104.80 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 104.60 with the 1st objective at 104.80 and then at 105.00. A breakthrough of 104.40 will invalidate this scenario.