On Friday the spot rate climbed up following the publication of positive U.S. economic indicators and reached the upper limit of its medium term bullish channel at 1.2450. Now it seems to initiate a decline. However, a break of these levels would release a large potential.
Technical indicators provide sell signals and approach overbuy zone suggesting a return to its intermediate support at 1.2280. However, the decline of the volume fears us false signals. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in a short term.
We can consider two options: the first one is trying "short" and sell the spot rate on the level of 1.2450 with a target at 1.2390. The second one is waiting and trying a buy on the intermediate support at 1.2280 with a target of 1.2340.
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