EUR/USD is currently attempting to settle below the support level at 1.0800. This level is the key as it gave the pair strong support in May 2020.
Since March 30, the Euro has been under strong bearish pressure. Now since April 12, the Euro is in an oversold phase. For now, there is no buy signal and it is likely to continue the downward movement towards the area 0/8 Murray around 1.0742.
On the other hand, the US Dollar Index (USDX) is trading around 100.65, showing signs of exhaustion.
At the opening this week, USDX left a gap at 100.32 and a correction to cover this gap is likely. In case the dollar index closes this GAP, it could give a strong boost to the Euro and thus, EUR/USD could overcome the resistance zone of 1.0830 (21SMA).
The euro fell sharply on Friday as the ECB left monetary policy and its rhetoric unchanged, disappointing investors and their expectation of aggressive measures, at least in the official statement.
The growing monetary policy divergence between the FED and the ECB may continue to weigh on EUR/USD this week. On the other hand, another factor could be that the current war between Russia and Ukraine continues to reduce the attractiveness of the euro and investors continue to take refuge in the US dollar and gold.
Our trading plan for the next few hours is to wait for a technical bounce at 0/8 Murray around 1.0742 to buy with targets at 1.0864 and the 200 EMA located at 1.0986.
On the other hand, if the euro closes above the 21 SMA located at 1.0830 on the 4-hour chart, it will be an opportunity to buy with targets at 1.0917 and 1.0986 where there is 2/8 Murray and the EMA 200, which acts as a strong resistance.
