Early in the American session, EUR/USD is trading around 1.0983, below the 21 SMA, and below the 4/8 Murray. On the H1 chart, we can see that the euro is going through a strong technical correction. EUR/USD is expected to reach the area of 1.0950 which coincides with the low of July 28.
We can see the formation of a rectangle pattern. EUR/USD is expected to bounce above 1.0940 and reach the area of 1.1047. An oscillating movement is likely to continue in the next few days.
A sharp break above the 5/8 Murray and above the 200 EMA as well as a close above this level on the 1-hour chart could accelerate the upward movement of the euro. Hence, EUR/USD could reach 6/8 Murray at 1.11087 and finally, 7/8 of Murray at 1.1169.
Our technical outlook for EUR/USD for the next few hours is that the instrument could consolidate above 1.0925 and below 1.1047. This movement will be valid until Friday before the publication of the NonFarm Payroll data, which could define the medium-term trend for EUR/USD.
The euro could extend its fall if it moves below 1.0925 (3/8 Murray). The key is to monitor the psychological level of 1.10 and sell below it. Then, the price could reach the 1.07 level in the next few days.