Following the increase seen on Friday, the spot rate has tested the upper limit of its medium term bullish channel at 97.80. After that it demonstrated a decline. A return to the intermediate support of its channel to 96.10 is expected. Moreover this level represents a retracement of 62% of the increase between August 02th and August 05th.
Technical indicators provide sell signals supporting the assumption of a decline to its intermediate support. However, a break of these levels would lead to acceleration to the lower limit of its channel to 95.10. Bollinger bands are much discarded as a result of a strong increase of these days. Stabilization is expected in a short term.
We recommend buying part of the positions on the level of 96.10. If the spot rate breaks its support level, we will buy the other part at the level of 95.10. Put a stop loss on the level of 94.80.