Early in the American session, the Euro is trading around 1.1114 and above the 21 SMA. EUR/USD is now going through a strong technical correction, having reached a high of 1.11387.
In case the Euro falls below 7/8 Murray and below 1.1127 (21 SMA), EUR/USD could reach the bottom of the uptrend channel formed since December 22. We could even expect a technical bounce.
Technically, the euro is overbought. Hence, a sharp break of the uptrend channel could trigger a strong technical correction and the instrument could reach the 200 EMA at 1.0998. If this scenario occurs, the euro could consolidate around the psychological level of 1.10 and could even reach 6/8 Murray at 1.0986.
The daily pivot point is around 1.1080. In case the euro falls, bounces, and settles above this level, it could trigger a resumption of the bullish cycle and EUR/USD could continue to rise to 1.1140.
If the 21 SMA (1.1112) becomes a resistance that prevents the euro from rising, it could mean a resumption of the bearish cycle. So, we can sell with the target at 1.10.
On the contrary, a daily close above 1.1120 will be seen as a clear signal to continue buying. EUR/USD could reach 8/8 Murray at 1.1230 in the short term.
