The euro is trading around 1.1690, rebounding after a negative opening that left a gap. The euro is expected to continue rising in the coming days and could close the gap it left around 1.1725. If the upward momentum prevails, the euro could close the gap within the next few hours.
The H4 chart for the EUR/USD pair shows positive consolidation, and the price is located within an uptrend channel. If the price struggles to continue rising above last week's high, we could expect a technical correction toward the 200 EMA or around 1.1616.
The Eagle indicator shows that the euro has reached overbought levels. Last week, we saw that the euro was in a zone of strong resistance, which coincided with the 4/8 Murray level and the top of the uptrend channel. This strong pressure has been alleviated by the bearish gap we saw. So, a consolidation above the 200 EMA could favor an upward move for the euro.
If the technical rebound continues and the euro consolidates above 1.17, this could be seen as a signal to continue buying with targets at the 4/8 Murray level; ultimately, we could expect EUR/USD to reach the 1.1735 zone, which represents daily resistance.
A consolidation below the 21-day SMA could be seen as a sell signal, as the Eagle indicator is showing negative signals. We could open long positions in the event of a technical rebound above 3/8.
