As we predicted, on Friday the spot rate bounced off at the lower limit of its medium term bullish channel at 1.5580 and reached the upper limit at 1.5700. It seems to be declining now but a break through these levels will release good potential and initiate a more violent bullish channel.
Technical indicators do not provide clear signals but until the resistance is not broken the assumption of a decline is most likely. Moreover, it approach of overbuy zone is supporting the assumption of a decline. Bollinger bands have stabilized showing a more regular volatility and evolve at the same levels as the upper limit and lower limit of the channel are supporting the hypothesis of a violent movement in case of the exit.
If the spot rate is at its resistance, then we can recommend 2 scenarios: the first one is to buy the spot rate as soon as it has broken through its resistance of 1.5700 with the 1st objective at 1.5760 and the further one at 1.5790. A break through 1.5680 will invalidate this scenario. The second one is to sell the spot rate at the level of 1.5700 with the 1st objective at 1.5640 and then at 1.5620. A breaking through 1.5720 will invalidate this scenario.