Early in the European session, the EUR/USD pair extended the bullish run and reached 1.07798, the highest level since April 25th. The pair remains in a strong uptrend supported by the 21 SMA, 200 EMA and because is trading within the bullish channel that remains intact.

The euro is being helped by the persistent weakness of the US dollar. The US currency was affected last week by worse-than-expected local data and the latest FOMC meeting minutes, which suggest a possible pause in rate hikes after the increase in June and July.

Early in the American session, the US dollar index is trading around 5/8 Murray, below the 200 EMA and the 21 SMA. If this downtrend continues, it is likely to benefit the euro which would lead it to reach the level of 1.8064 in the next few hours.

According to the 4-hour chart, we can see an uptrend channel formed since May 12. This trend could continue if the euro consolidates above the 4/8 Murray in the coming hours or above the 21 SMA located at 1.0710.

Last week, the overbought signals, according to the eagle indicator, reached the 1.0742 area. However, the technical correction set the stage for a new rally in EUR. EUR/USD is likely to reach 1.0864 in the coming days for a new overbought signal.

The secondary trend is bullish and it is being supported by the 200 EMA at 1.0667. A sharp break on the 4-hour chart and a close below 1.0667 could mean a technical correction and the price could drop towards the 61.8% Fibonacci around 1.0498.

A good area is to wait for 4/8 Murray at 1.0742 to buy, with targets at 1.0864 (5/8). On the contrary, if the technical correction pressure pushes the price down to the 21 SMA around 1.0710, it will be an opportunity to buy with targets at 1.0780. So, it will be an opportunity to buy with targets at 1.0780 and 1.0864 (5/8 Murray).