The exchange rate has resumed its rally, however, it seems to be topping now and there is a possibility that it could fall from here, setting up a head and shoulders pattern as it completes the right shoulder. If so, then I would expect to see some downside to the lower channel line and the monthly and weekly pivots supporting 1.3115, then from a possible break of the neckline and down to the 1.29s. A continuation higher is less likely but still possible, and in this situation I see the exchange rate rising to match the 1.3235 highs initially with follow through to the 1.34s possible afterwards.
Analysis by: Joaquin Monfort
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