The euro is trading around 1.0800, within the uptrend channel forming since February 12th, and within a main downtrend channel forming since January 23rd. Over the past few days, the Euro has been bouncing above 1.0700 and could now face strong resistance at the 200 EMA located at 1.0820 and the top of the downtrend channel around 1.0845.
The euro could continue to rise in the coming hours. As we just saw during the European session, the euro bounced from the support of 1.0770 and is likely to continue its upward movement until reaching the resistance of 1.0840. If EUR/USD reaches the zone of 1.0840-1.0845, the price could make a technical correction due to overbought levels.
The eagle indicator on the H4 chart is approaching the overbought zone. So, the euro is likely to face strong resistance and could resume its bearish cycle if it finds a rejection below 1.0864. This resistance located at 2/8 Murray represents a strong barrier for the euro. As long as the pair trades below, it could be seen as a signal to sell with the target at 1.0700.
In case the euro falls below the 21 SMA at 1.0768, the outlook could be negative. Hence, the instrument could resume its bearish cycle. Then, we could expect it to reach 1.0742, 1.715 and finally, the bottom of the downtrend channel around 1.0675.
Our strategy for the next few hours is to buy EUR/USD above 1.0770 with the target at 1.0840. Otherwise, we could wait for the euro to reach the resistance zone around the 200 EMA or the top of the downtrend channel to sell with targets at 1.0768 and 1.0742.
