Yesterday in the American session, the Euro reached the top of the downtrend channel formed on the 4-hour chart at around 1.0200.
After reaching the low of 0.9951 on July 14, the euro has recovered, although the price still has a bearish bias. Currently, the EUR/USD pair is trading above the 21 SMA and above 3/8 Murray which means a positive outlook for the coming days.
Yesterday in the European session, it reached levels of July 7th. Currently, this technical bounce is attributed to the fact that the Euro bears are taking profits, which has caused a momentary rally. In the short term, if the Euro trades below 1.0360, it could resume the downtrend.
If the initial uptrend prevails, EUR/USD could eventually reach the 4/8 Murray resistance located at 1.0253. If the latter is broken, it will reach the July 5 levels at 1.0315, and finally the 200 EMA at 1.0362.
On the other hand, the first support of EUR/USD would be 1.0131. If the price breaks below 3/8 Murray, it could drop towards the 21 SMA at 1.0068. Additionally, a daily close below this level could push the price to a 20-year low at 0.9952. If this support is broken, the next challenge for EUR/USD bears will be the lows of December 2002 at around 0.9859.
The eagle indicator is showing a positive signal. However, it is approaching overbought levels. If the euro fails to break the top of the downtrend channel, we could expect a correction and the price could reach the 2/8 Murray at 1.0002.
Our trading plan for the next few hours is to sell below 1.0185 with targets at 1.0068 and 1.0002. In the event of a daily close above 1.0200, we could buy with targets at 1.0250 and 1.0360.
