Early in the American session, the EUR/USD pair is trading around 1.1257, showing the exhaustion of bullish strength, and below the downtrend channel. A technical correction is expected in the coming days.
During the European session, the euro attempted to break out of the downtrend channel but was unsuccessful. We believe a sharp decline could occur in the coming days, reaching the psychological level of 1.10.
Therefore, we will look for opportunities to sell the euro below 1.1270, with a target at the 200 EMA located at 1.1196.
The euro has left a gap around 1.1170. If EUR/USD falls below the 6/8 Murray level located at 1.1230, the bearish pressure could accelerate, with the price potentially covering this gap and even continuing its fall to 1.0986.
On the other hand, if the euro consolidates above 1.1290, the outlook could be bullish and EUR/USD could then reach 7/8 Murray at 1.1474.
The eagle indicator is approaching an overbought zone, so we believe a technical correction could occur in the coming days. Therefore, our outlook for the euro will remain negative below 1.1270.
