As
we 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.
We
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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