Early in the European session, the Euro is trading around 1.0898, below the 21 SMA, and above +1/8 Murray. According to the H4 chart, we can see that the euro is trading within a trend channel and shows levels of exhaustion. It is likely that a technical correction could occur in the coming days.
The FED minutes reiterated authorities' concerns about inflation and noted that further tightening of monetary policy would be appropriate if progress toward the 2% inflation target was insufficient. This stance could affect the strength of the euro and it could fall to the psychological level of 1.05.
In the chart above, we can see that the Euro has formed a head-and-shoulders pattern. Therefore, as it trades below the high reached around 1.0964, it could prepare for a technical correction in the short term. So, the Euro could reach 8/8 Murray located at 1.0742 and even the 200 EMA located at 1.0723.
Since November 17, the eagle indicator has been showing overbought levels. Hence, if the euro falls, breaks the uptrend channel, and consolidates below 1.0827, we could expect a trend reversal and a bearish acceleration that could push the price down to 7/8 Murray located at 1.0620.
On the other hand, in case the euro consolidates above the 21 SMA located at 1.0917 and trades above this level, the outlook could be bullish for the euro, but for this, we should expect a daily close above the maximum of 1.0964. Then, EUR/USD could reach +2/8 Murray located at 1.0986 and even surpass the psychological level of 1.10.