22.02.202115:20 Forex Analysis & Reviews: EUR/USD: plan for the US session on February 22 (analysis of morning trades)

To open long positions on EURUSD, you need to:

In the first half of the day, I paid attention to the support level of 1.2109 and recommended to act from it. Let's look at the 5-minute chart and talk about what happened. Even at the first test of this level, no specifics could be achieved. The repeated return and breakdown of this range did not form a signal to sell the euro, since the bulls easily flashed this area after the reverse test from the bottom up, and the data from the IFO institute returned new buyers to the market.

At the moment, the pair is trading near the high of last Friday in the resistance area of 1.2143. For the second half of the day, we had to revise the nearest levels. A break and consolidation above 1.2143, with a test of this level from top to bottom, will lead to the formation of a signal to open long positions in the expectation of continued growth of the euro to the maximum of 1.2167, where I recommend fixing the profits. Given that important fundamental statistics are not released in the second half of the day, the volatility will be quite low. However, do not forget about the speech of the President of the European Central Bank, Christine Lagarde, which can properly shake up the markets. If we see a decline in EUR/USD in the second half of the day, it is best to postpone long positions for a rebound from the support of 1.2093, from where we can expect an upward correction of 15-20 points within the day. The next and larger support level is seen in the area of 1.2037.

To open short positions on EURUSD, you need to:

The bears will count on Lagarde's performance and the formation of a false breakout in the resistance area of 1.2143, where the pair is currently trading. However, you can only go against the trend if the president of the European Central Bank touches on the bond-buying program or the euro exchange rate. Such a scenario will lead to a downward correction of EUR/USD to the support area of 1.2093, where I recommend taking the profits. A longer-range target will be a minimum of 1.2037, however, we are unlikely to go to it today. If the sellers do not show any activity in the area of 1.2143, it is best to wait for the update of the last week's high and sell the euro immediately to rebound with the aim of a downward correction of 15-20 points within the day. The next major resistance level is seen in the area of 1.2194.

Let me remind you that the COT report (Commitment of Traders) for February 9 recorded an increase in short and long positions, which reflects the current situation. The equality of buyers and sellers characterizes the entire last week when the pair spent in a side channel. It is important to note that any adequate decline in the EUR/USD pair has always been accompanied by rapid purchases, and the fact that the US dollar continues to be less in demand among investors has already been repeatedly stated. Therefore, I believe that the more correct approach to the market is to buy the European currency. The only problem for the euro remains the lack of guidance from the European Central Bank and the risk of verbal interventions that limit the upward potential. However, with each significant downward correction of the pair, the demand for the euro will only increase. The COT report shows that long non-profit positions rose from the level of 216,887 to 220,943, while short non-profit positions rose from the level of 79,884 to the level of 80,721. As a result, the total non-profit net position increased after last week's decline to the level of 140,222 from the level of 137,003. The weekly closing price was 1.2052 against 1.2067 a week earlier.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which indicates that the euro will continue to grow in the short term.

Note: The period and prices of the moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

A break of the upper limit of the indicator in the area of 1.2143 will lead to a new wave of growth of the euro. In the case of a decline in the pair, the lower border in the area of 1.2105 will provide support.

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
• Non-profit speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
• Long non-commercial positions represent the total long open position of non-commercial traders.
• Short non-commercial positions represent the total short open position of non-commercial traders.
• Total non-commercial net position is the difference between the short and long positions of non-commercial traders.