The spot rate has been testing since yesterday the intermediate resistance of its medium-term bullish channel at 100.70 suggesting a decline. However, a break of these will release good potential and reach the upper limit of its channel at 101.30.
Technical indicators provide sell signals and approach overbuy zone and until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in a short-term.
As the spot rate is currently testing the intermediate resistance of its channel, we suggest 2 scenarios: the first one is the hypothesis of a decline where we recommend a sell at the level of 100.70 with the 1st objective at 100.10 and then at 99.90. A breakthrough of 100.90 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means buying the spot rate as soon as it is broken through its resistance of 100.70 with the 1st objective at 101.30 and then at 101.50. A breakthrough of 100.50 will invalidate this scenario.