18.02.202113:20 Forex Analysis & Reviews: EUR/USD: plan for the US session on February 18 (analysis of morning trades)

To open long positions on EURUSD, you need to:

In the first half of the day, it was not possible to enter the market from the levels indicated in the morning. Let's look at the 5-minute chart and figure out what happened. The focus was shifted to the level of 1.2048. However, the bears failed to achieve the formation of a false breakout in this range, and the breakout of buyers did not lead to a reverse test of this area from top to bottom, which forced them to miss the entry point. Surprisingly, the lack of important fundamental statistics helped the euro to strengthen its position. It is for this reason that we had to revise the current technical picture of the EUR/USD pair.

In the second half of the day, buyers of the euro will have to try to achieve a breakdown and consolidate above the resistance of 1.2075, where the first upward wave stopped. A break and consolidation above this level with a test of it from the reverse side, which we did not wait for today during the European session, will form a convenient entry point into long positions to continue the bull market, which can return the euro to the maximum of 1.2122. Moving averages, which pass around 1.2075, are also a problematic point on the way for euro buyers. In the case of a downward correction of the pair in the second half of the day, only the formation of a false breakdown in the support area of 1.2037 forms a signal to open long positions in EUR/USD. You can buy the euro immediately on the rebound from the minimum of 1.2003 with the expectation of an upward correction of 20-25 points within the day.

To open short positions on EURUSD, you need to:

The bears will rely on the fundamental statistics on the US economy and on the minutes of the January meeting of the European Central Bank, which may prevent the bulls' plans to break above the resistance of 1.2075. However, I recommend opening short positions only in case of an unsuccessful consolidation above the resistance of 1.2075 with the return of the euro under it after the data. Only in this case, you can expect the pair to fall to the support area of 1.2037, which coincides with the minimum of today. A break and consolidation below this range will push the European currency even lower - to the minimum of 1.2003, where I recommend taking the profits. If the bears do not show any activity in the resistance area of 1.2075 in the second half of the day, it is best to postpone selling for a rebound from the resistance of 1.2122 in the expectation of a downward correction of 20-25 points within the day.

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 past 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 mentioned. 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 in the area of 30 and 50 daily moving averages, which indicates the sideways nature of the market 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

In case of a decline in the pair, the lower limit of the indicator in the area of 1.2025 will act as 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.