The spot rate is currently testing the lower limit of its medium-term bearish channel at 1.3220 suggesting a rebound. However, a break of this level will free a large potential and initiate a more violent bearish channel.
Technical indicators provide sell signals, but 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 these days. Stabilization is expected in the short term.
The spot rate is currently testing the lower limit 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 1.3220 with the 1st objective at 1.3280 and then at 1.3300. A breakthrough of 1.3200 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 1.3220 with the 1st objective at 1.3160 and then at 1.3140. A breakthrough of 1.3240 will invalidate this scenario.
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