The spot rate approaches the lower limit of its medium-term bearish channel at 1.2670 suggesting a rebound. However, a break of these levels 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 have stabilized showing a more regular volatility.
The spot rate approaches 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 1.2670 with the 1st objective at 1.2730 and then at 1.2750. A breakthrough of 1.2650 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 1.2670 with the 1st objective at 1.2610 and then at 1.2590. A breakthrough of 1.2690 will invalidate this scenario.