Early in the Asian session, EUR/USD opened with a bearish Gap, from the high that closed Friday at 1.1269 to today's opening price at 1.1124 (145 pips).
During the Asian trading session on Thursday, Russia announced that it had launched a special military operation against Ukraine. The market's fear triggered an intense slide to safety and pushed EUR/USD lower to reach 1.1050.
In case Russia reinforces its intention to seek a diplomatic solution and refrain from advancing its troops in the coming days, the euro is likely to make a bullish recovery.
Today at the opening of the Asian session, the euro fell again and is currently trading around 1.1151. The bias remains bearish as it failed to hold above the 21 SMA located at 1.1283.
As we had discussed in our previous analysis, the brief recovery in the euro was an opportunity for the bears to sell. The EUR/USD pair is now approaching oversold levels and a technical bounce is likely in the coming days.
In the next few hours, we expect a technical rebound around 2/8 Murray located at 1.1084. If the euro manages to hold above this level, there will be a chance of a recovery and the pair could cover the gap it left at the high of 1.1269.
Conversely, if the euro's bearish pressure prevails, a move towards the support 1/8 Murray located at 1.1047 is likely to continue.
The eagle indicator is showing an extreme oversold signal. In the coming hours, the euro is likely to have a technical bounce towards the area 4/8 Murray or the 21 SMA at 1.1248.
Our trading plan for the next few hours is to buy the euro only in case of a bounce around 1.1084 with targets at 1.1169, 1.1169, and 1.1275.