17.02.202114:56 Forex Analysis & Reviews: EUR/USD: plan for the US session on February 17 (analysis of morning trades)

To open long positions on EURUSD, you need to:

In my morning forecast, I paid attention to the level of 1.2085 and recommended actions based on it. Let's look at the 5-minute chart and talk about what happened. The lack of fundamental statistics on the euro area kept the market bearish, and the breakout of the level of 1.2085 led to a larger drop in the pair. The bottom-up test of this area formed an excellent entry point for short positions. At the time of writing, the downward movement was about 25 points, however, we did not reach the key target in the area of 1.2048.

Buyers need to think about how to regain control of the level of 1.2085, but before that, it will take a lot of effort to protect the support of 1.2048. The formation of a false breakout forms a good signal to open long positions to return to the resistance area of 1.2085. A break in this area and its test from top to bottom forms an additional signal to buy the euro already in the expectation of updating the maximum of 1.2125, where the moving averages pass. I also recommend fixing the profit. If there is no active growth from the level of 1.2048, and the US data will be much better than economists' forecasts, then it is best to postpone long positions until the update of the minimum of 1.2003, from where you can buy the euro immediately for a rebound in the expectation of an upward correction of 20-25 points within the day.

To open short positions on EURUSD, you need to:

The bears coped with the task and broke below 1.2085, forming a new wave of decline in the euro within the day. For the US session, the target will be at least 1.2048, however, it will be possible to break below only after the publication of good indicators on changes in the volume of retail trade in the US, the producer price index, and changes in industrial production. The test of the level of 1.2048 from the bottom up will form an excellent entry point into short positions to return to the minimum of 1.2003, where I recommend fixing the profits. In the scenario of an upward correction in the second half of the day, it is best not to rush to sell the euro. Only the formation of a false breakout in the resistance area of 1.2085 will indicate a return to the market of large sellers. In the absence of an active movement of the euro down from this range, I recommend postponing short positions until the test of a larger resistance of 1.2125 and sell the euro there immediately for a rebound in the expectation of a downward correction inside by 20-25 points.

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 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 below 30 and 50 daily moving averages, which indicates a further decline in the euro on the newly formed trend.

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 the case of growth of the pair, the average border of the indicator in the area of 1.2090 will act as a resistance.

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.