FX.co ★ Trading signal for EUR/USD on February 17-20, 2023: buy above 1.0615 (3/8 Murray - strong support)

Early in the American session, the Euro is trading around 1.0628. We can see that the line of 3/8 Murray located at 1.0620 will be the next support to break. Bearish sentiment continues to pressure the Euro and it is now located in a key support area which could offer a technical bounce and recovery for the pair.

The fall of the EUR/USD pair during the last few days is a consequence of the persistent hawkish narrative of the Fed officials. The euro has fallen to the levels of the beginning of January. The 1-hour chart is showing an extremely overbought signal which suggests that there could be a strong technical rebound in the coming hours.

According to the 4-hour chart, we can see that the instrument is trading within a downtrend channel formed since early February. It is currently approaching the bottom of this channel, which coincides with the 3/8 Murray line, which could give it a good technical rebound for the next few days.

In case the EUR/USD pair recovers above 1.0615, it is expected to reach the 21 SMA located at 1.0697. Later on, the price could reach the 200 EMA located at 1.0734.

If bearish pressure prevails and the Euro consolidates below 1.06 20 it could reach the 2/8 Murray zone at 1.0498.

Our trading plan for the next hours is to wait for the Euro to consolidate around 1.0615 - 1.0630. If this scenario comes true, it could give us a signal that the Euro has found a bottom and a technical bounce is highly probable which will be seen as an opportunity to buy with the target at 1.07.