Early in the American session, the EUR/USD pair is trading around 1.0860 within the uptrend channel forming since October 28th below 2/8 Murray and showing signs of exhaustion.

EUR/USD could continue the technical correction until the price reaches the bottom of the uptrend channel around 1.0840.

US nonfarm payrolls will be released in the next few hours, which could cause strong volatility in the EUR/USD pair. In case the euro reaches the top of the bullish trend channel or the 200 EMA around 1.0920, it will be seen as a signal to sell.

On the other hand, if the euro falls and consolidates above the 21 SMA, it will be seen as an opportunity to resume buying with the target at 3/8 Murray around 1.0925.

According to the H4 chart, the euro is showing signs of being overbought. So, we believe that if the H4 chart closes below 1.0840, EUR/USD could resume its overall bearish cycle and the EUR/USD could reach 1.0803 and finally 0/8 of Murray around 1.0742.