Early in the American session, the Euro (EUR/USD) is trading around 1.0847, within the downtrend channel forming since May 14, and below the 21 SMA showing signs of exhaustion. The technical correction is likely to continue in the coming hours only if EUR/USD consolidates below 1.0851.
The euro is oversold, but the H4 chart signals a possible technical correction towards the 200 EMA around 1.0799 so that EUR/USD could then resume its bullish cycle.
On the other hand, in case the euro consolidates above 1.0864, the outlook could be revised. Hence, the euro could reach the May 14 high at 1.0894 and could even touch the psychological level of 1.10.
The euro could lose the possibility of a further advance and turn bearish if it consolidates below 1.0800 on the H4 chart, then it could reach the low of May 8 at 1.0716.
Our trading plan for the next few hours is to sell the euro below the 21 SMA located at 1.0851 with targets at the 200 EMA located at 1.0800 and the first weekly support at 1.0730.
