Early in the European session, the Euro is trading around 1.0835, below 2/8 Murray, and within the uptrend channel forming since February 13. If the bearish pressure intensifies in the coming hours and the euro falls below 1.0836, we could expect there to be a sharp break of the uptrend channel which could be seen as an opportunity to sell with the target at 0/8 Murray located at 1.0742.
Since the weekend the euro has tried to break 2/8 Murray around 1.0864 but has failed on several occasions. As a result, this area has become a strong resistance and the euro is likely to further decline in the coming days. The bearish target is seen at 1.0681.
If the euro makes a technical bounce above the 21 SMA located at 1.0836 in the coming hours, we could expect it to try to break the 1.0864 resistance again. In case EUR/USD fails to consolidate above this area, it will be seen as an opportunity to sell with the target at 1.0700.
Our technical outlook for the euro will remain bearish because the eagle indicator has been producing an overbought signal since February 23. Therefore, a technical correction is realistic in the coming days. So, our key selling point for the euro will be to trade only below 1.0864.
