The spot rate is currently testing the intermediate support of its medium-term bullish channel at 107.30 suggesting a rebound. However, a break of these levels will free a large potential and reach the lower limit of its channel at 106.20.
Technical indicators do not provide clear signals and 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 is currently testing the intermediate support 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 107.30 with the 1st objective at 107.90 and then at 108.20. A breakthrough of 107.10 will invalidate this scenario. The second scenario is a break of its support where we recommend a “sell stop” which means to sell the spot rate as soon as it is broken through its support of 107.30 with the 1st objective at 106.70 and then at 106.50. A breakthrough of 107.50 will invalidate this scenario.