Yesterday, the EUR/USD pair reached its peak at 1.2272, its highest level since April 2018. EUR took advantage of the downward force of the USDX, which took it to the low of 89.61, its lowest level of 2018. At present, the US dollar is very oversold. If it recovers in the next few hours or until next week, we could see a downward correction of EUR/USD.
In the American session at this time of writing, we note that EUR/USD is trading at near the high of 1.2272, and is also above the 21 SMA. If the pair sustains its climb above 1.2250, we could see a bullish momentum up to yesterday's high. If it breaks above this level, the price could rise up to strong resistance at 1.2294.
The eagle indicator is giving a bearish signal, although we can expect a correction in its signal. Therefore, if the euro makes an upward momentum after that, it could come under downward pressure again, as the possible movement of the indicator is represented in the chart.
Our recommendation is to sell below 1.2240. If the currency pair consolidates below the 21 SMA, we could see a decline to the support, of 1.2207 (8/8) and dropping lower to the 200 EMA at 1.2146 (7/8).
The market sentiment for today, December 18, shows that there are 65% of operators that are selling EUR/USD. We have noticed a slight decrease compared to yesterday, this could be a sign that EUR/USD could fall in the next few days up to the 1.2085 zone (6/8 murray).
Trading tip for EUR/USD for December 18 – 21
Sell below 1.2240, with take profit at 1.2207 (8/8) and 1.2146 (EMA 200), stop loss above 1.2280 (+1/8 murray)
Buy if the pair trading above at 1.2250 (SMA 21), with take profit at 1.2277 (+1/8 murray), and 1.2294 (strong resistance), stop loss below 1.2215.