FX.co ★ EUR/USD Intraday Technical Analysis

The spot rate broke yesterday the intermediate resistance of its long-term bearish channel at 1.2830 leading to an acceleration. It tests now the upper limit of this one at 1.3220 suggesting a decline. However, a break of these levels will free a large potential and initiate a bullish channel.

Technical indicators provide buy signals but until 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. Furthermore, the superior band evolves on the levels of the spot rate supporting the assumption of a decline.

As 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 1.3220 with the 1st objective at 1.3160 and then at 1.3140. A breakthrough of 1.3240 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 1.3220 with the 1st objective at 1.3280 and then at 1.3300. A breakthrough of 1.3200 will invalidate this scenario.