EUR/USD pair extended its weekly decline to 1.0873, a new low for the month so far. This fall in the Euro is partly due to the strength of the US dollar (USDX) and also to the crisis in Eastern Europe.
Early in the American session, EUR/USD is trading above the 21 SMA located at 1.0904. Currently, the currency pair is trading at 1.0928 on the 1-hour chart, breaking the 21 SMA and breaking the downtrend channel that has formed since March 30.
However, risk is pushing to the downside, according to technical readings. On the daily chart, the pair remains below the 21 SMA located at 1.1003 with a negative outlook.
According to the 1-hour chart, the euro is oversold and a technical correction is likely in the next few hours towards the zone 200 EMA located at 1.1008. With a break of this moving average, the price could reach 3/8 Murray at 1.1108.
Conversely, a break below 1.0864 could push the price to the support 0/8 Murray at 1.0742. A break of this support would open a bearish move towards 1.0635, the low 2018.
The key event of the day will be in the afternoon of the American session, with the publication of the minutes of the last FOMC meeting, which is expected to give clues about the increase in the interest rate in the coming months.
According to the last bearish movements that the euro had, it is likely that the market has discounted any announcement by the FOMC. If the rate-setting committee fails to convince investors in their minutes, the euro is likely to make a technical correction and may reach the psychological level of 1.1000.
Our trading plan is to buy above the 21 SMA located at 1.0904 with targets at 2/8 Murray 1.0986 and the 200 EMA at 1.1008. The eagle indicator is giving a positive signal which supports our bullish strategy.