The spot rate approaches the lower limit of its medium-term bearish channel at 128.60 suggesting a rebound. However, a break of these levels will free a large potential and initiate a more violent bearish channel.
Technical indicators do not provide clear signals but, until the support is not broken, the assumption of a rebound is most likely. Bollinger bands are much discarded as a result of a strong decline these days. Stabilization is expected in a short term.
The spot rate is currently testing the lower limit of its channel, so we recommend 2 scenarios: the first one is the hypothesis of a rebound, then we recommend a buy on the level of 128.60 with the 1st objective at 129.20 and then at 129.40. A break through 128.40 will invalidate this scenario. The second scenario is a break of its support, then we recommend a sell stop, which means to sell the spot rate as soon as it has broken through its support of 128.60 with the 1st objective at 128.00 and then at 127.80. A break through 128.80 will invalidate this scenario.
The material has been provided by InstaForex Company - www.instaforex.com
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