In the early American session, a few hours before the weekly close of the foreign exchange market, we noticed that EUR/USD has been extending consolidation for several days between the 3/8 of murray (green line) and the support of 2/8 of murray (red line).

It is important to note that the last 4-hour candle has formed an engulfing candle. So, the odds are that the downward pressure will continue in the next hours.

If you look at the 4-hour chart, we have drawn a downtrend channel from the high of November 9 to today, giving a moderate bearish inclination, which implies that this pair is preparing for a possible fall, only if remains below this zone.

Besides, the 3/8 murray resistance at 1.1901 is a barrier. The pair is likely to try to break out, but looking at the dollar index we note that it has gained strong support and likely to rebound which would give EUR/USD a drop below 1.1880 or 1.1901.

We have also traced a fibonacci fan, which indicates up to the place that this pair could retrace. It has already made its first retracement to 38.2%. We hope that the downward pressure will take it to 50% and 61.8% Fibonacci zone that coincides with the EMA of 200 and 1/8 of Murray.

Our recommendation is to sell the euro, only if in the next few hours it trades below 1.1860 and below the EMA 21, with targets at 1.1832 2/8 support and the uptrend channel (yellow line), a break for below 1.1830 and a pullback below this area. The target will be 1.1776.

Looking at the eagle indicator, we notice that the bullish momentum is running out of steam. It is very likely that there will be a correction in this pair in the next few days, as we have drawn a channel which indicates that there is downward pressure in the market, waiting for some fundamental data.

On the other hand, market sentiment includes 71% of investors who are holding short positions. It is important to note this figure, since it indicates that in the medium term, investors will seek an upward movement to 1.20 and 1.21 if the figure continues to increase.

Trading tip for EUR/USD for November 20-23

Sell below 1.1880 (trend line) with take profit at 1.18400 and stop loss above 1.11920

Sell if the pair breaks below 1.1835 with take profit at 1.1779 (1/8 murray) and stop loss above 1.1875.

Buy if the pair rebound around EMA 200 at 1.1780 with take profit at 1.1860 and stop loss below 1.1740.