The spot rate broke the intermediate support of its medium term bullish channel at 1.5680 leading to acceleration. A pull back on these levels is expected before reaching the lower limit of its channel to 1.5620. Furthermore an exit of its channel would release a significant potential and initiate a bearish trend.
Technical indicators provide sell signals supporting the assumption of a decline in a short term. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement. Moreover, the inferior band strengthens the support at 1.5660.
We recommend to sell the spot rate on the level of 1.5680 with the 1st objective at 1.5620 and then at 1.5600. A breakthrough 1.5700 will invalidate this scenario.
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