Early in the American session, EUR/USD is trading around 1.0851, below the 2/8 Murray, and below the 21 SMA located at 1.0858. It is clear a technical correction due to the overbought levels.
In the H-4 chart, we can see that yesterday in the American session, the euro reached the top of the downtrend channel around 1.0944 and was rejected by the 200 EMA located at 1.0926 and by the 3/8 Murray located at 1.0925.
The area below 1.0950 to 1.0920 has become strong resistance for the Euro and we have seen a strong technical correction since then. It is probable that in the next few hours, the instrument will continue a bearish sequence. If bearish strength prevails, the Euro could reach the bottom area at about 1.0750 in the downtrend channel and even drop as low as 0/8 Murray at 1.0742.
The technical short-term outlook suggests that the Euro is exhausted. So, it is likely that the bears may try to maintain control unless the Euro recovers to the area of 1.0920 (200 EMA).
If EUR/USD manages to stabilize above 1.0920, it could reach the psychological level of 1.10 and the high of August 10 at 1.1064. Finally, it could climb up to 6/8 Murray at 1.1108.
However, according to the 4-hour chart, it seems that the bearish pressure could prevail if the Euro consolidates below 1.0900, The eagle indicator reached 95 points yesterday which suggests an imminent correction to unfold in the next few days.
