Early in the American session, the Euro is trading around 1.0858, below the 21 SMA, and below the +1/8 Murray. We can see that it has been trading in this zone for almost 10 days and it could be a sign of exhaustion of the bullish force. The instrument could initiate a technical correction in the coming days.
The latest Japanese candles formed on the 4-hour chart show that the EUR/USD pair could start a bearish sequence but for this, we should expect it to trade below the daily pivot point located at 1.0872.
According to the 4-hour chart, we can see that the euro is trading within an uptrend channel formed since January 12, in which a sharp break and a daily close below 1.0805 could result in a bearish acceleration and the price could fall towards 8/8 Murray at 1.0742 and could even reach the 200 EMA located at 1.0673.
Conversely, for the continuation of the uptrend, the Euro needs a sharp break of 1.0925 to allow a test of the weekly resistance at 1.0956. With a sustainable break above this level, the instrument could face the key barrier of +/2/8 Murray (1.0986) and ultimately reach the psychological 1.10 level.
The market sentiment report shows that there are 62.60% of traders selling the pair. This could be a clear sign of a technical correction towards support levels. Later on, the instrument will resume its main uptrend.
Our trading plan for the next few hours is to sell the Euro below +1/8 Murray located at 1.0865 or below 1.0872, which represents the daily pivot point. In case the Euro is trading above this zone, we should avoid selling.
