The euro is trading around 1.1676, below the 200 EMA, below the 21 SMA and within the bearish trend channel formed on September 16.
The euro managed to break below the strong support of Murray's 8/8 and the 200 EMA during yesterday's American session. This is likely to be the beginning of a bearish sequence, provided that the EUR/USD pair remains below 1.1840.
If the euro recovers and tests the support at 1.1718, which has now become resistance, and if it fails to break above it, the bearish cycle could resume.
On the other hand, if bearish pressure continues, we expect the euro to reach 1.1596. Then, EUR/USD could even fall to the psychological level of 1.1500.
If the instrument recovers and settles above 1.1720, the outlook could be positive, and we could expect a sharp breakout of the downtrend channel, with EUR/USD potentially returning to the 1.1840 level.
The eagle indicator on the H4 chart has reached oversold levels, so a recovery in EUR/USD is expected in the coming days. We could see it trading in the range between 1.1630 and 1.1770.
