Early in the American session, EUR/USD is trading above the 21 SMA at 1.0437 and below the strong resistance of 2/8 Murray at 1.0498.
According to the 4-hour chart, we can see the formation of a diamond pattern, which signals that the euro could resume its uptrend and reach 1.0770 and even 1.0800 in the coming days.
On June 15, the eagle indicator touched an extreme oversold zone, forming a double bottom pattern with the low of May 13. Yesterday, the euro bounced off 1/8 Murray, thus proving to be strong support. It is likely that as long as it remains above this level, the euro could make a bullish recovery in the short term.
A close on daily charts above 2/8 Murray at 1.0498 could mean the start of a bullish sequence for the euro. The currency could quickly reach the 200 EMA at 1.0626. The confirmation of this bullish movement can be visualized if it consolidates in daily graphs above 1.0500.
As long as it remains below the 200 EMA, any momentum in the euro will be seen as an opportunity to sell. Just in case it fails to break 1.0626 and consolidate above this level, it will be an opportunity to sell below this area, targeting 1.0430 (21 SMA).
A daily close above the 200 EMA on 4-hour charts could be a sign of a trend change in the medium term. The euro could reach the level of 1.0864 (5/8 Murray) or even the psychological level of 1.10.
In the short term on 1-hour charts, the euro has strong resistance at 1.0532, in line with the 200 EMA. Failure to consolidate above this level will be an opportunity to sell and a technical correction is likely.
Our trading plan for the next few hours is to buy the euro above the 21 SMA located at 1.0437 with targets at 2/8 Murray (1.0498) and 1.0540. Failure to break the EMA 200 located at 1.0540 will be a signal to sell, with targets at 1.0498 and 1.0450.