The spot rate is currently testing the intermediate support of its medium-term bullish channel at 90.60 suggesting a rebound. However, a break of these levels will free a large potential and reach the lower limit of its channel at 89.20.
Technical indicators provide sell signals and until the support is not broken the assumption of a rebound is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
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 90.60 with the 1st objective at 91.20 and then at 91.40. A breakthrough of 90.40 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 90.60 with the 1st objective at 90.00 and then at 89.80. A breakthrough of 90.80 will invalidate this scenario.