FX.co ★ EUR/USD: plan for the US session on February 15 (analysis of morning trades)

EUR/USD: plan for the US session on February 15 (analysis of morning trades)

To open long positions on EURUSD, you need to:

In my morning forecast, I paid attention to the level of 1.2149 and recommended acting on it. Let's look at the 5-minute chart and talk about what happened. Given the low volatility of the market, the test of the level of 1.2149 did not take place in the first half of the day, so there were no signals to enter the market. The fundamental data on the European economy was ignored by traders, as it was not of particular importance. The guidelines of buyers and sellers remained the same.

From a technical point of view, nothing has changed, and the pair remained trading in a narrow side channel, in which it was all last week. This afternoon marks Presidents' Day in the United States, so do not expect high volatility. The pair will continue to be in a narrow side channel. The news from the Eurogroup meeting, which will discuss the issues of vaccination of the eurozone and its prospects, can lead to a small movement in the EUR/USD pair. In the case of EUR/USD growth during the US session, buyers will focus on a breakout and consolidation above the resistance of 1.2149. A test of this area from top to bottom forms an excellent signal to open long positions in the euro with the aim of further growth in the area of the maximum of 1.2187, where I recommend taking the profits.

The more distant target of the bulls remains the resistance of 1.2220. If in the second half of the day we do not see active actions on the part of buyers, then the pressure on the euro may return. In this case, the bulls will need to focus on protecting the support of 1.2110, just above which the moving averages pass. The formation of a false breakout forms a good entry point into long positions with the expectation of continuing the upward trend. If there is no activity of buyers at this level, I recommend postponing long positions until the test of the minimum in the area of 1.2069, from where you can buy the euro immediately on the 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 did not wait for the test of the level of 1.2149 in the first half of the day. I recommend selling EUR/USD against the upward trend only if a false breakout is formed in the area of the above resistance. Only a test of the level of 1.2149 from the bottom up forms a signal to enter the market. It is not necessary to count on fundamental data for the United States since there are no such data. An equally important task for sellers will be the return of EUR/USD to the support area of 1.2110, on the breakdown of which the further direction of the pair depends.

A breakout and a test of this level from the bottom up will form a new entry point for sales, which will push EUR/USD to the minimum in the area of 1.2069, where I recommend taking the profits. A more distant target will be the area of 1.2035. If during the US session we will continue to observe the upward trend of the euro, and the bears will not show any activity in the resistance area of 1.2149, then it is best to postpone short positions until the test of a new high of 1.2187, from where you can sell EUR/USD immediately on a rebound to reduce by 20-25 points within the day. The next major resistance is seen around 1.2220.

Let me remind you that the COT report (Commitment of Traders) for February 2 recorded a sharp increase in short positions and a reduction in long positions, which reflects the downward correction of the pair in late January and early February of this year. Weak fundamental data on the eurozone economy and lower economic estimates, which were given by representatives of the European Central Bank last week, limit the upward potential of the euro, as well as the fact that vaccination in the eurozone will take place at a slower pace than expected. All this will lead to a double-dip recession of the European economy in early 2021, but it is unlikely to seriously affect the medium-term prospects for the recovery of the EUR/USD.

Therefore, with each significant downward correction of the pair, the demand for the euro will only increase, and the lower the exchange rate, the more attractive it will become for investors. The prospect of lifting the quarantine will keep the market positive in the future. The COT report shows that long non-profit positions declined from 238,099 to 216,887, while short non-profit positions rose from 72,755 to 79,884. Due to the sharp decline in long positions, the total non-profit net position fell to 137,003 from 165,344 a week earlier. The weekly closing price was 1.2067 against 1.2142.

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.

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

The volatility has decreased, which does not give signals for entering the market.

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.