Early in the American session, the euro is trading around 1.1708 after reaching a high of 1.1745, a level last seen in August 2021. The euro has strengthened in recent days due to the weakness of the dollar, resulting from poor US monetary policy.
Technically, the euro is overbought and is trading at its highs. A strong technical correction from current levels toward the psychological level of 1.15 is likely in the coming days.
The euro has been trading within an upward trend channel since the beginning of June, and practically reached the top of this channel today. We believe that below the 8/8 Murray level, there could be strong pressure for a technical correction.
If the euro price consolidates below 1.1735, the outlook could be negative for the coming days. We could sell with targets at the 7/8 Murray at 1.1596 and at the bottom of the uptrend channel around 1.1540. EUR/USD could eventually reach the 6/8 Murray at 1.1474.
The Eagle indicator suggests a technical correction for the coming days, so if the euro consolidates below the current high, it will be seen as a sell signal.
