FX.co ★ Trading Signal for EUR/USD for April 19 - 20, 2022: buy above 1.0800 (1/8 Murray - 21 SMA)

Early in the American session, EUR/USD is trading above the 21 SMA located at 1.0783 on the 1-hour chart. Currently, the euro is trading at 1.0801 which could be a positive sign as long as the Euro remains above 1.0780.

On the 1-hour chart, we can see that the euro has been trading within a downtrend channel formed since April 14th. A daily close above 1/8 Murray and a sharp break of this downtrend channel could accelerate the move higher and the price could reach 200 EMA at 1.0849.

A sharp break above 1.0849 and a close above this level on reh dauly chart could prolong the upside move and the currency pair could hit the target at 1.0925, the high of April 14.

The US dollar (USDX) reached a new high around 100.98, the level was last seen at the end of March 2020.

Given that the dollar index is making a technical correction because it is showing signs of exhaustion, it is likely that there could be a technical correction in the next few hours.

In the event of a pullback of the dollar index, the euro could gain ground and we could expect it to recover. EUR/USD could reach the psychological level of 1.1000 in the short term.

To extend its bounce from the low 1.0760, EUR/USD needs to break above the 200 EMA located at 1.0849. Above that level, the area of 1.0864 (2/8 Murray) and 1.0925 (3/8 Murray) appear as the next barriers. If settles above this level, the euro could easily reach the psychological level of 1.1000.

On the downside, the key support is found at 1.0780 (21 SMA) and weekly support is seen at 1.0760. A close below 1.0783 on the daily chart could easily push the pair down towards 0/8 Murray at 1.0742.

Our trading plan for the next few hours is to buy the euro as long as it remains trading above 1/8 Murray around 1.08 with targets at 1.0843 and 1.0925.