Having reached new weekly highs in the area of 1.0563, EUR/USD changes its direction and is now heading to the support of 1.0498. Early in the American session, having reached support at 2/8 Murray, the currency pair is trading at around 1.0518 with a short-term bullish bias.
The 4-hour chart of the EUR/USD pair suggests a recovery towards the 200 EMA around 1.0670.
In the short term, and according to the 4-hour chart, the outlook remains biased to the upside. The pair is trading at around 1.0520, above the 21 SMA located at 1.0458, but still remains below the 200 EMA which exerts bearish pressure.
According to the 4-hour chart, we can see that the Euro has broken the downtrend channel formed at the beginning of May. This technical correction could be a positive sign for an advance in the coming days. The pair could reach 3/8 Murray at 1.0620 and even 200 EMA at 1.0670.
In the event of a technical bounce, the Euro is likely to find strong support at the 21 SMA located at 1.0458. Around this level, there will be an opportunity to buy the euro, with targets at 1.0560, 1.0620 (3/8) and 1.0670 (200 EMA).
The eagle indicator in the European session reached the overbought zone at around 95-points. This limited the bullish strength of the euro. Once the technical correction is complete in the next few hours, the EUR/USD pair could resume the upward movement.
Our trading plan for the next few hours is to buy the Euro above 1.0498 (2/8 Murray) or in the event of a break of this level wait for a consolidation around 1.0458 to buy. The eagle indicator is giving a positive signal which supports our bullish strategy.