The euro is trading around 1.0803 within the uptrend channel forming since April 24, above the 21 SMA, and above 5/8 Murray. We can observe the formation of a double top that will be confirmed if the euro falls below 1.0803. We expect a technical correction as EUR/USD is showing signs of exhaustion and approaching overbought levels.
After reaching the bottom of the downtrend channel on May 8, the euro made a technical rebound and from there it rose to 1.08. The euro is now showing positive signs and we could expect it to continue rising in the coming days but a technical correction comes first.
Technically, the euro is overbought since the eagle indicator has reached the 95-point zone. It represents an imminent technical correction. If the euro falls below 1.0803 in the next few hours, it will be seen as a signal to sell with targets at 1.0766 or 1.0749.
On the contrary, if the euro consolidates above 1.0800, the outlook could be positive and we could buy with a target at 1.0864.
Given that the euro is within an upward trend channel, we could expect there to be a technical correction, which will favor opportunities to resume long positions. If EUR/USD falls to the bottom of the uptrend channel located at 1.07650, it will be seen as a buying opportunity.
The outlook for the euro could change in the next few days if EUR/USD breaks and consolidates below 4/8 Murray (1.0742). Then, we could expect a change in the trend and EUR/USD could reach the final target of 1/8 Murray located at 1.0559.
