The spot rate approaches the upper limit of its medium-term bullish channel at 105.30 suggesting a decline. However, a break of these levels will initiate a more violent bullish channel.
Technical indicators do not provide clear signals 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, we suggest 2 scenarios. The first one is the hypothesis of a decline then we recommend a sell on the level of 105.30 with the 1st objective at 104.70 and then at 104.50. A breakthrough of 105.50 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means to buy the spot rate as soon as it is broken through its resistance of 105.30 with the 1st objective at 105.90 and then at 106.10. A breakthrough of 105.10 will invalidate this scenario.