The spot rate approaches the upper limit of its medium term bearish channel at 1.3220 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators do not provide clear signals but approach overbuy zone and, until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands have stabilized showing a more regular volatility.
The spot rate is currently testing the upper limit of its channel, so we recommend 2 scenarios: the first one is the hypothesis of a decline, then we recommend to sell at the level of 1.3220 with the 1st objective at 1.3280 and then at 1.3300. A break through 1.3200 will invalidate this scenario. The second scenario is a break of its resistance, then we recommend a “buy stop”, which means to buy the spot rate as soon as it breaks through its resistance of 1.3220 with the 1st objective at 1.3280 and then at 1.3300. A break through 1.3200 will invalidate this scenario.
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