In the early American session, the EUR / USD pair is trading below the SMA of 21 and above the strong support that combines the 8/8 line of Murray, with the EMA of 200. This is the key level to watch. With the consolidation below this level, we expect a fall to 7/8 of murray located at 1.2146.
In the 1-hour chart, we notice a bullish wedge pattern being formed. If the 1.2207 area is broken sharply, the bullish outlook for this pair would be confirmed and the euro could rise to 1.2146 level.
On the other hand, the euro is showing a sign of exhaustion in 1-hour charts as the reading of the eagle indicator is showing an overbought signal. This is seen on the chart as a deceleration of the bullish force. Supply in the market could increase and the euro could make a downward correction in the next few hours.
This week, the NFP data from the United States is in investors' radars. No doubt, the markets are anticipating the data that will be published on Friday. But before, we expect the EUR / USD pair to make a technical correction to get out of the overbought levels and consolidate in the neutral ground before this data.
The market sentiment for EUR / USD today shows that there are 65.26% of traders who are selling the EUR / USD pair. This is a sign that the inherent upward force still remains. The buyers wait for a support zone to enter the market and to buy during a new bullish wave that could go as high as 1.23.
Our recommendation is to sell below 1.2230 that is where the 21 SMA is located. Alternatively, if a break is made from the 200 EMA and 8/8 Murray, sell below with targets at 1.2143. We must be very careful above 1.2260.
Support and Resistance Levels for June 01 - 02, 2021
Resistance (3) 1.2289
Resistance (2) 1.2260
Resistance (1) 1.2241
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Support (1) 1.2193
Support (2) 1.2164
Support (3) 1.2145
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Trading tip for EUR/USD for June 01 - 02, 2021
Sell below 1.2228 (SMA 21), with take profit at 1.2207 (8/8), and 1.2143 (7/8) stop loss above 1.2260.
Sell if breaks 1.2207 (8/8 of murray) with take profit at 1.2146 (7/8), stop loss below 1.2242.