Early in the European session, the euro was trading around 1.0409 within the downtrend channel forming since early December, above the 21 SMA, and below the 2/8 Murray.

The euro is in a downtrend channel. If it consolidates below 1.0409 in the next few days, it is likely to reach the 0/8 Murray located at 1.0253.

On the other hand, in case of a sharp break above the downtrend channel and consolidation above 1.0420, we could expect a trend reversal to occur and the euro could reach 1.0498 and even the 200 EMA around 1.0535.

The key thing to keep in mind is that the euro has good support around 1.0376. We could expect a technical bounce above this area to take EUR/USD towards 3/8 of Murray located at 1.0620. On the contrary, below this key level, we could expect the euro to fall to 1.0253.

The Eagle indicator is showing a negative signal, so we will wait for a confirmation to sell below 1.0390.