Early in the American session, the EUR/USD pair is trading around 1.0889 above the 21 SMA within an uptrend channel formed since August 17.
In the European session, the euro reached a high at around 1.0930 and since then, began a strong technical correction. In case the instrument breaks the downtrend channel and consolidates below 1.0880 (21 SMA), we could expect a further bearish movement and the price could reach 1.0864 (2/8 Murray) as the last support.
In case of a break of 1.0860 and consolidation below this area, we could expect a sharp decline to 1/8 Murray at 1.0803 and 0/8 Murray at 1.0742.
In case of a recovery in the EUR/USD pair, it should break the 200 EMA located at 1.0964. This acts as a stop and barrier and in case it fails to break the level, it should be used as an opportunity to sell.
On the other hand, if the euro breaks and consolidates above 1.0964 (200 EMA), the first target is determined at the psychological level at 1.1000 and the second one is at the high of August 10 at 1.1064. The ultimate target is seen at 1.1108 (6/8 Murray).
Our trading plan for the next few hours is to sell below 1.0885, with targets at 1.0864 and 1.0800. The Eagle indicator is giving a negative signal. So, we could continue selling in the short term and the euro could reach 1.0742.
