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The EUR / USD pair in the morning of the American session, in 4-hours charts is trading above the 21 SMA and below the strong downtrend channel, (1.1765) a sharp break is likely to occur for an upward momentum.

The US dollar, USDX, is strengthening due to the impressive pace of coronavirus vaccines and the planned stimulus by the Biden administration of more than 2 trillion dollars raising expectations for a relatively faster recovery from the pandemic in the United States.

There are some doubts as to whether the Fed will maintain ultra-low interest rates for a longer period as this could continue to push the yield on the benchmark 10-year US government bond, and give USDX strength.

On a technical level, bearish traders are likely to wait for some subsequent sell below the 1.1738 mark (that’s where the 21 SMA sits, on 4-hour charts), before positioning themselves for any further depreciation moves. The pair could become vulnerable to accelerate the decline and test the 1.1718 support area, 0/8 from Murray and lower at 1.1655.

On the other hand, any significant rise in the EUR / USD is likely to exert strong resistance and risk rapidly disappearing near the 1.1840 mark.

This level is 1/8 of Murray, however, a sustained bullish force beyond that level could push the pair towards the 200 EMA, located at 1.1939, which should give it downward pressure there.

Therefore, a sharp break of the downtrend channel is expected, and to consolidate above this level to be able to buy, with targets at 1.1840 and 1.1939 EMA 200.

The eagle indicator is giving a bullish signal and it is likely that in the next few days the EUR / USD will reach the 1.1840 mark, as a short-term target.

Support And Resistance Levels For April 05 – 06, 2021

Resistance (1) 1.1799

Resistance (2) 1.1817

Resistance (3) 1.1847

Support (1) 1.1742

Support (2) 1.1726

Support (3) 1.1705

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Trading tip for EUR/USD for April 05 – 06, 2021

Buy above 1.1775 (SMA 21 and downtrend channel) with take profit at 1.1805 and 1.1840, stop loss below 1.1730.

Sell below 1.1760 (downtrend channel) with take profit at 1.1716 (0/8), stop loss above 1.1795.

The material has been provided by InstaForex Company – www.instaforex.com

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