The spot rate is currently testing the intermediate resistance of its medium term bearish channel at 1.2270 and seems to initiate a decline. However, a break through these levels will release good potential and will be able to reach the upper limit of this one to 1.2450.
Technical indicators do not provide clear signals but until the resistance is not punctured the idea of a decline is most likely. Bollinger bands have greatly narrowed recently, indicating a decline in volatility and the imminence of a violent movement.
Thus the market will provide a bullish opportunity as soon as the spot rate has broken through its resistance of 1.2270 with the 1st objective at 1.2330 and then at 1.2350. A break through 1.2250 will invalidate this scenario.
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