Early in the American session, the Euro is trading below 4/8 Murray around 1.0707 after reaching a European session high of 1.0765, the highest level since April 25.

EUR/USD is trading above the 21 SMA with a bullish bias but exhausted by resistance at 1.0742. The short-term trend according to the 4-hour chart remains bullish.

Key short-term supports are seen at 1.0699 (21 SMA) and then at 1.0661 (200 EMA). A drop below the latter would leave EUR/USD vulnerable to further losses and the pair could hit 2/8 Murray at 1.0498.

In the opposite direction, a firm return above 1.0750 and a close there on daily charts would support the Euro going towards 5/8 Murray around 1.0864.

The positive change in risk sentiment seen since May 16 made the dollar lose interest. Currently, the dollar index is trading above 5/8 Murray at around 101.66. This fall in the dollar gave a strong upward momentum to the euro, but it could be in a phase of a technical correction for the next few days.

According to the 4-hour chart, we can see that since May 12 the euro has been trading within an uptrend channel. Besides, the euro has found support above 1.0661(200 EMA) and 1.0699 (21 SMA).

As long as the euro trades within the uptrend channel and above the 21 and 200 moving averages in the coming days, we could expect the trend to continue and the price could reach the resistance of 5/8 Murray at 1.0864.

Since May 24, the eagle indicator has been giving an overbought signal. So, a technical correction is likely in the next few days so that the euro can resume its upward trend.

Our trading plan for the next few hours is to wait for a pullback towards 1.0750 to sell, with targets at 1.0699 and 1.0661. In case of a technical bounce around the 200 EMA at 1.0661, there will be an opportunity to buy with targets at 1.0742 and 1.0864.