The pair is holding softer tone on Tuesday, following uninterrupted rally that lasted for seven straight days and peaked at 1.3695 (fourteen–month high).
Fresh boost has been received on break above former tops at 1.3586/96 (14 Nov / 28 Dec 2016 peaks) which also mark the top of thick weekly cloud and now act as supports.
Initial signs of correction are seen on overbought daily RSI / slow stochastic which would generate stronger bearish signal on reversal.
First support at 1.3634 (Monday’s low) is still holding with break lower and daily close in red, expected to signal further easing.
Weekly cloud top and former peaks, together with Fibo 38.2% of 1.3409/1.3695 upleg, mark a cluster of strong supports loss of which would signal deeper correction and expose rising daily Tenkan-sen at 1.3552.
With no releases from Canada scheduled, focus will turn towards tomorrow’s comments from Fed after policy meeting ends, which are expected to stronger influence performance of the US dollar.
Res: 1.3681, 1.3694, 1.3726, 1.3845
Sup: 1.3634, 1.3585, 1.3552, 1.3518
