EURUSD is moving in a short-term uptrend since the ascending trend channel on its 1-hour time frame is still holding. Price is making its way to the channel support near the 1.2750 minor psychological level, which might continue to hold as a floor.

Stochastic is moving out of the oversold area, with a shallow bullish divergence indicating a possible bounce. If that happens, EURUSD might make its way back to the top of the range near the 1.2900 major psychological level. MACD is also reflecting a potential return in buying pressure.

In addition, the SMAs are in line with the channel bottom, reinforcing the potential support. If this is broken though, it could be a sign that EURUSD is in for a downtrend and may be due to test the previous lows at the 1.2500 levels

Going long at 1.2750 with a tight stop and a target of 1.2900 could work for a technical trade. If you’re bearish on this pair, you could wait for a downside break of 1.2700 and aim for the lows near the 1.2500 area.

Editor’s Note: Equity investors/traders can use the Currency Shares Euro Trust (FXE, quote) ETF to take positions in the euro without a FOREX account.  The ETF looks to track the price of the euro (EURUSD), minus ETF fee. The fund seeks to reflect the price of the euro with the shares representing a cost-effective investment relative to investing in the FOREX market.

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