The spot rate is currently testing the lower limit of its medium-term bearish channel at 101.60 suggesting a rebound. However, a break of these levels will free a large potential and initiate a more violent bearish channel.
Technical indicators provide buy signals, and until the support is not broken the assumption of a rebound is most likely. Bollinger bands have stabilized showing a more regular volatility.
The spot rate is currently testing the lower limit of its channel, we suggest 2 scenarios. The first one is the hypothesis of a rebound where we recommend a buy on the level of 101.60 with the 1st objective at 102.20 and then at 102.40. A breakthrough of 101.40 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means to sell the spot rate as soon as it is broken through its support of 101.60 with the 1st objective at 101.00 and then at 100.80. A breakthrough of 101.80 will invalidate this scenario.