© Dukascopy Bank SA
It seems that a rally started more than 20 days ago is now overextended and requires a correction in order for the bullish momentum to regain strength. While technical indicators are largely mixed (1H and 4H time-frames), the price continues to advance, but at the same time is little by little reducing the width of fluctuations, namely forming a rising wedge pattern that usually preordains a reversal, in this case a sell-off. Once the support at 1.3655 is breached, the pair should aim for 1.3617, but could also fall down to the 200-hour SMA at 1.3551 that is slightly below the daily S2 level at 1.3565.
© Dukascopy Bank SA