FX.co ★ EUR/USD Intraday Technical Analysis

The spot rate bounced off to the intermediate support of its medium term bearish channel at 1.2290 and tests now the upper limit of this one at 1.2380 suggesting a decline. However, a break of these levels will free a large potential and initiate a bullish trend.
Technical indicators provide buy signal but are approaching overbuy zone supporting a decline and until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands have stabilized showing a more regular volatility. In addition, the upper band strengthens the upper limit of its channel supporting the hypothesis of a violent movement in case of failure.
The spot rate tests its resistance that is why we recommend 2 scenarios: the first one is the hypothesis of a decline where we suggest a sell on the level of 1.2380 with the 1st objective at 1.2440 and then at 1.2460. A breakthrough 1.2360 will invalidate this scenario. The second scenario is the hypothesis of a break of its resistance and here we advise a “buy stop”. We recommend to buy the spot rate as soon as it has broken through its resistance of 1.2380 with the 1st objective at 1.2440 and then at 1.2460. A breakthrough 1.2360 will invalidate this scenario.