Early in the American session, EUR/USD is trading around 1.0315, above the 21 SMA, and below the top of the downtrend channel with a positive bias. If a sharp break of this channel occurs, we could expect the euro to reach the 200 EMA located at 1.0395. The instrument could reach even the 6/8 Murray around the psychological level of 1.05 in the next few days.

If the euro consolidates above 1.0320 in the next few hours, it will be seen as a signal to buy with targets at 5/8 Murray at 1.0385 and 1.0395. The 200 EMA acting as a strong resistance could prevent the euro from a further rise. Once the price is below this area, it could be seen as an opportunity to sell.

On the other hand, if the euro consolidates below 1.0298, we could see the resumption of the bearish cycle and the euro could reach 3/8 of Murray at 1.0131 in the next few days.

The key thing to watch in the coming hours is that the price of the euro remains above 1.0300. Above this area the outlook will be positive, but below this the bearish cycle will resume.