The spot rate is currently testing the intermediate support of its medium-term bearish channel at 1.2840 suggesting a rebound. However, a break of these levels will reach the lower limit of its channel at 1.2740.
Technical indicators provide buy signals, oversell zone is approaching and until the support is not broken the assumption of a rebound is most likely. Bollinger bands are much discarded as a result of a strong decline in recent days. Stabilization is expected in the short term.
The spot rate is currently testing the intermediate support 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 1.2840 with the 1st objective at 1.2900 and then at 1.2920. A breakthrough of 1.2820 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 1.2840 with the 1st objective at 1.2780 and then at 1.2760. A breakthrough of 1.2860 will invalidate this scenario.