EUR/USD is losing steam after the US employment report. It had initially reached 1.0600 in the European session, but then changed direction and fell around 1.0550.
EUR/USD is erasing gains as the dollar is advancing. The pair reached 1.0595 (top of downtrend channel) in light of the NFP data, but failed to break above. This level has become a key barrier in the short term.
According to the 4-hour chart, we can see that the Euro is trading below a downtrend channel formed since April 20th.
Early in the American session, the Euro has tested the top of the downtrend channel around 1.0600-1.0590.
This top is strong and a sharp break and a close above 1.0600 on the 4-hour chart are likely to be a clear signal to buy the euro and it could reach 4/8 Murray at 1.0742 and the 200 EMA at 1.0790 in the next few days.
On the other hand, if not exceeded, a technical correction towards the SMA 21 located at 1.0550 is expected. A technical bounce above this level could be an opportunity to buy the euro with targets at 1.0600 and 1.0742.
On the contrary, if the euro closes below 1.0550 (21 SMA), we should exercise caution and wait for a technical bounce around 3/8 Murray (1.0498).
The support that the euro reached below 3/8 Murray has formed a double bottom pattern which would signal that the euro could continue its uptrend and could reach the level 1.0800 in the coming days.
Our trading plan for the next few hours is to buy the Euro around 1.0550 or above 1.0600. The eagle indicator is giving a positive signal which supports our bullish strategy.
