As I predicted on Friday, there was a violent decline and the spot broke its intermediate support at 96.10 and accelerated to the lower limit of its medium term bullish channel to 95.80. It is testing now these levels suggesting a rebound. However, a break through these levels will release a good potential and initiate a violent bearish channel.
Technical indicators do not provide clear signals but approach oversell zone supporting the assumption of a rebound. Moreover, until the support is not broken, the hypothesis of a rebound is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
I can consider two scenarios: the first one is to buy on the level of 95.80 with the 1st objective at 96.40. The second one is a “sell stop” and sell as soon as the spot rate is broken through its support at 95.80 with the 1st objective at 95.20.
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