The euro's 170-pip rally on Friday represented a 50% correction from the extremes observed between July 24 and August 1. While the technical picture has noticeably shifted, the core medium-term bearish scenario for the European currency remains intact.

We believe the correction is now complete, and the EUR/USD pair will attempt to reach the target support level at 1.1266, with pullbacks expected from intermediate levels.

On the four-hour chart, the price has consolidated above the MACD line, but for this move to be classified as a false breakout, a return below this line must occur.

This may be the euro's objective for the entire day, as the market likely needs time to cool down after such a sharp rally — especially given that today is a public holiday in both the UK and Canada.