Early in the European session, the EUR/USD pair is trading around 1.0857 within the uptrend channel forming since April 29 and below 6/8 Murray under a technical correction.
It is expected that the euro will continue to make a technical correction in the next few hours and could reach the 21 SMA located at 1.0840. EUR/USD could even reach the bottom of the bullish trend channel around 1.0817.
If the euro makes a technical rebound and consolidates again above 1.0864, the outlook could be positive, but the instrument could encounter strong resistance around 1.0894.
The H4 chart shows that the euro has strong resistance in the area between 1.0884 and 1.0895. Therefore, we could expect that in case there is a pullback and EUR/USD fails to break resistance, it could resume the technical correction.
A sharp break of the downtrend channel and a consolidation below 1.0815 could be the beginning of a trend change for the euro and the instrument could find good support around 1.0767 and at 4/8 Murray located at 1.0742.
A positive outlook could still be maintained in the euro if it consolidates above 1.0750. Above this area, the euro could resume its bullish cycle and reach the psychological level of 1.10.
On the contrary, with a consolidation below 1.0742 (4/8 Murray) on the daily chart, the outlook could be negative. Thus, EUR/USD could reach 1.0681 in the short term, 1.0620, and even the psychological level of 1.05.
In the meantime, we will look for opportunities to sell the euro as the eagle indicator is showing overbought signals. As long as the euro trades below 1.0900, it will be seen as a signal to sell.
