EUR/USD is bouncing after bottoming near the level 1/8 Murray at 1.0864. The 4-hour chart shows that the 21 SMA puts the Euro under bearish pressure and receives support at 1/8 Murray for now providing a strong bottom.
The minutes of the latest meeting of the Federal Reserve, rethe market is convinced about rate hike of 50 basis points at the next meeting.
This information was anticipated by investors and the market turned bearish. Therefore, a week before the FOMC minutes were published, the market sold EUR/USD and it fell to a low of 1.0860. As this information is already known, a recovery of the Euro is expected in the next few days.
According to the 4-hour chart, the Euro keeps the bearish bias intact. Only a firm break above 1.0940, where a line resistance crosses there and where the 21 SMA is located, the euro would gain support and a recovery would be expected.
The recovery of the euro in the next few days is considered temporary. According to the daily chart, the EMA 200 is located at 1.1397, which suggests a greater fall in the medium term.
Therefore, we will have a good opportunity to sell the Euro if it fails to break the 21 SMA located at 1.0940, with targets at 1.0864. Conversely, if the euro bounces off the support at 1.0864, it will be a good opportunity to buy with targets at 1.0940 and 1.1064 (200 EMA).