Early in the American session, EUR/USD fell to a new low at around 1.0050. If the downward pressure continues, the euro could fall to 2/8 Murray, the level where the euro could reach the parity of 1$ per 1Euro.
In case, the euro reaches the parity at 1.0000 around 2/8 Murray given that this level represents strong support and a strong psychological level, we could expect a technical bounce around this area.
The euro is expected to continue its downtrend. However, we assume a strong technical bounce these days due to oversold conditions in the pair.
As long as the pair trades below the 21 SMA (1.04) and below the resistance 5/8 Murray around 1.0375, the bearish pressure is expected to prevail.
On the daily chart, we can see the formation of a downtrend channel formed from March 9. Hence, the euro is likely to continue trading within this channel in the coming days.
Any technical bounce in the proximity to 5/8 Murray or towards the top of the downtrend channel will be viewed as an opportunity to continue selling. The euro is likely to consolidate for a good period of time at around the 1,000 zone.
The long-term outlook for the currency pair remains bearish as long as EUR/USD trades below the 200 EMA at 1.1080
Our trading plan for the next few hours is to buy the euro as long as it trades above 1.0050 waiting for a technical bounce and targeting the 21 SMA. On the other hand, in case of a strong technical bounce at 1.0000, it will also be an opportunity to buy with targets at 1.04 (top downtrend channel).