FX.co ★ Strategy of the day on EUR/USD

The spot rate approaches the upper limit of its medium-term bearish channel at 1.3080 suggesting a decline. However, a break of this level will initiate a violent bullish channel.
Technical indicators provide buy signals, but the rate approaches 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 the short term.
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 where we recommend a sell on the level of 1.3080 with the 1st objective at 1.3020 and then at 1.3000. A breakthrough of 1.3100 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 1.3080 with the 1st objective at 1.3140 and then at 1.3160. A breakthrough of 1.3060 will invalidate this scenario.