The spot rate approaches the lower limit of its medium-term bearish channel at 119.10 suggesting a rebound. However, a break of this level will free a large potential and initiate a more violent bearish channel.
Technical indicators provide buy signals and 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 the short term.
The spot rate is currently testing the lower limit of its channel, we suggest 2 scenarios. The first one is the hypothesis of a rebound where we recommend a buy on the level of 119.10 with the 1st objective at 119.70 and then at 119.90. A breakthrough of 118.90 will invalidate this scenario. The second scenario is a break of its support where we recommend a “sell stop” which means to sell the spot rate as soon as it is broken through its support of 119.10 with the 1st objective at 118.50 and then at 118.30. A breakthrough of 119.30 will invalidate this scenario.