Early in the American session, the EUR/USD pair is trading around 1.0406, above 1/8 of Murray, and within the downtrend channel forming since November 29th.
Yesterday during the American session, the euro reached the low of 1.0325 and covered the gap that it had left on November 20th around 1.0417.
Since the euro is showing a slight recovery while consolidating above 1/8 of Murray, we could expect EUR/USD to reach 21 SMA located at 1.0465 and even climb to the 200 EMA located at 1.0576.
Since the market is showing signs of overselling, it is likely that the euro will consolidate above 1.03 and below 1.05 due to low liquidity at the end of the year. Meanwhile, we will look for opportunities to buy within this range.
A sharp break and consolidation above the psychological level of 1.05 and above 2/8 Murray could mean a strong recovery. Therefore, we expect the instrument to reach 4/8 Murray 1.0742 and even rebound to 1.0864.