FX.co ★ Trading Signal for EUR/USD for July 31, 2023: buy above 1.0986 (21 SMA - 6/8 Murray)

Early in the American session, EUR/USD is trading around 1.1018 below the 21 SMA located at 1.1021 and within an uptrend channel formed since July 27. It is expected that in the next few hours, the instrument will resume its bullish cycle and could reach 6/8 Murray at 1.1084.

Last week, after the interest rate decisions by the central banks in the US and Europe, EUR/USD fell from the high of 1.1150 towards 1.0943. Now we see a strong technical recovery and we could expect that in the next few days, the price will continue to rise until it reaches the levels of 1.1094 and 1.1145.

In the medium term, the bullish outlook seems limited because the euro is now overbought on the daily chart. With any technical bounce and as long as it trades below 1.1170 (7/8 Murray), we could expect a technical correction and EUR/USD could reach the psychological level of 1.10 and up to the 200 EMA at 1.0782.

We can expect that in the next few hours, it will make a technical rebound around 4/8 Murray located at 1.0986, a level that coincides with the 23.6% Fibonacci. EUR/USD is expected to reach the 1.1067 zone and finally, the top of the channel uptrend around 1.1084.

In case EUR/USD falls below 1.0980, it is expected to reach the 3/8 Murray at 1.0925 and could even accelerate its bearish move and reach one-month support and the 200 EMA at about 1.07 on the daily chart.

Our trading plan for the next few hours is to wait for a technical bounce around 1.0986 to buy with targets at 1.1047 (5/8 Murray), 1.1070 (61.8%) and finally at 1.1108 (6/8 Murray).