The spot rate approaches the lower limit of its medium-term bearish channel at 1.3030 suggesting a rebound. However, a break of these levels will free 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 a short term.
The spot rate is currently testing the lower limit of its channel, so we suggest 2 scenarios: the first one is the hypothesis of a rebound, then we recommend a buy on the level of 1.3030 with the 1st objective at 1.3090 and then at 1.3110. A break through 1.3010 will invalidate this scenario. The second scenario is a break of its support, then we recommend a sell stop, which means to sell the spot rate as soon as it has broken through its support of 1.3030 with the 1st objective at 1.2970 and then at 1.2950. A break through 1.3050 will invalidate this scenario.
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