As we predicted yesterday, the spot rate broke the upper limit of its medium term bullish channel at 99.00 and accelerated initiating a more violent bullish channel. It is testing now the intermediate resistance of this one at 100.10 suggesting a decline. However, a break of these levels will free good potential and reach the upper limit of its channel at 101.10.

Technical indicators provide buy signals but until the resistance is not broken, the assumption of a decline is most likely. Concerning Bollinger bands, the spot rate broke yesterday the superior band resulting in a spacing of those.

As 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 at the level of 100.10 with the 1st objective at 99.50 and then at 99.30. A breakthrough of 100.30 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means buying the spot rate as soon as it is broken through its resistance of 100.10 with the 1st objective at 100.70 and then at 100.90. A breakthrough of 99.90 will invalidate this scenario.