To open long positions on EURUSD you need:
Yesterday’s collapse in the US stock market and weak data on the growth of the US consumer confidence index led to another will to strengthen the European currency against the US dollar, which allowed the bulls to take the resistance of 1.0865.
Further growth of the pair will depend on this level. However, one should not expect the euro to rapidly grow in the medium term. In the COT reports (Commitment of Traders) for February 18, there was a sharp increase in short non-profit positions from 255,144 to 262,093, while long non-profit positions remained almost unchanged and increased from 169,475 to 170,586.
As a result, the non-profit net position became even more negative and increased from -85,669 to -91,507. All this indicates that bearish sentiment prevails in the market. As for the short-term outlook, buyers need to form a false breakout at the level of 1.0865, which will keep the demand for EUR/USD and will lead to updates of the highs of 1.0895 and 1.0925, where I recommend taking profit.
If, as throughout the week, a downward correction of the pair is observed at the European session, then it is best to look at long positions after testing the lower boundary of the channel at 1.0840, or buy the euro immediately for a rebound from a low of 1.0835. Given that of the important data today, only one statement by the European Central Bank Chief Christine Lagarde can be expected to further strengthen the pair.
To open short positions on EURUSD you need:
The sellers’ task for the first half of the day will be to return the pair to the support level of 1.0865, since we can only expect a downward correction to the area of moving averages in this scenario, as well as to the lower boundary of the upward channel, which is located slightly above the support of 1.0835.
Consolidating below this range will quickly pull down the euro to a low of 1.0807, where I recommend taking profits. In the scenario of EUR/USD growth in the morning, as well as after Lagarde’s speech, the area of 1.0895 will act as resistance, from which I recommend opening short positions only if a false breakout is formed. Selling the euro immediately for a rebound is best done from a larger high of 1.0925.
Signals of indicators:
Moving averages
Trading is conducted above 30 and 50 moving averages, which indicates the likelihood of further upward correction of the euro. If the pair declines, the moving averages will also act as support.
Bollinger bands
Growth will be limited by the upper level of the indicator at 1.0896. If the pair decreases, you can buy for a rebound from the lower boundary of the indicator in the area of 1.0830.
Description of indicators
Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
MACD indicator (Moving Average Convergence / Divergence – Moving Average Convergence / Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
Bollinger Bands (Bollinger Bands). Period 20
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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