Early in the European session, the Euro is trading around 1.0872, above the downtrend channel that was formed since May 14 and, within the uptrend channel.
We believe that the euro could continue its rise if it consolidates above 1.0839 (21 SMA). Given that the eagle indicator reached the oversold zone and a strong divergence is observed, it is likely that after a technical correction the euro could resume its bullish cycle.
If this scenario occurs, EUR/USD could reach 1.0894 which represents the high of May 14 and could even reach the psychological level of 1.10 in the short term.
On the contrary, if the euro falls and consolidates below 1.0840 and returns to trading within the bearish channel that was broken, we could expect it to reach the support of the 200 EMA located at 1.0794.
The market sentiment report shows that there are 59.62% of traders who are selling the euro. According to this statistics, it is likely that the euro could have a technical correction in the coming days, but in the short term, EUR/USD could continue to rise and reach 1.0965, where strong weekly resistance is located.
