FX.co ★ EUR/USD strategy of the day

The spot rate is currently testing the intermediate resistance of its medium-term bearish channel at 1.2860 suggesting a decline. A break of these levels will let it reach the upper limit of its channel at 1.2920.

Technical indicators do not provide clear signals, but, as long as the resistance is not broken, the assumption of a decline 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 resistance of its channel, then we recommend 2 scenarios: The first one is the hypothesis of a decline, then we recommend a sell at the level of 1.2860 with the 1st objective at 1.2800 and then at 1.2780. A break through 1.2880 will invalidate this scenario. The second scenario is a break of its resistance, then we recommend a buy stop, which means to buy the spot rate as soon as it has broken through its resistance of 1.2860 with the 1st objective at 1.2920 and then at 1.2940. A break through 1.2840 will invalidate this scenario.