The spot rate is currently testing the upper limit of its medium term bullish channel in 1.6060 and is likely to decline. However, a breakdown of these levels will reveal significant potential and initiate a more violent bullish trend .
Technical indicators provide signals for Sell-deals and approaching the overbuy zone confirms the assumptions of a decline. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
Proceeding for previous situation, the market indicates a bullish opportunity as soon as the spot rate will has broken its resistance in 1.6060 with 1.6120 and 1.6150 seen as first objectives. In case the level 1.6040 is passed through, the proposed scenario will be invalidated.