FX.co ★ EUR/USD: plan for the US session on February 16 (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 that the GDP of the eurozone was slightly better than economists' forecasts, and the index of sentiment in the business environment of Germany and the eurozone increased significantly – this led to the strengthening of the European currency and the breakdown of the resistance of 1.2149. In fairness, it is worth noting that we did not get a normal consolidation and test of the level of 1.2149 from top to bottom, since this area was very smeared, so I did not manage to enter long positions, as planned in the morning forecast.

As long as the trade is conducted above the resistance of 1.2149, we can expect the euro to continue to grow within the day. The test of the level of 1.2149 from top to bottom during the US session forms an excellent point for opening long positions in the continuation of the upward trend. In this case, you can count on the growth of EUR/USD in the area of a new high of 1.2187, where I recommend fixing the profit. The more distant target of the bulls will be the resistance of 1.2220. The speeches of the representatives of the Federal Reserve System are unlikely to have a serious impact on the market, however, there are no other fundamental statistics, so we will only have to keep an eye on this. If in the second half of the day we do not see any active actions on the part of buyers, and the pair slowly returns to the level of 1.2149, then only the formation of a false breakdown will form a new entry point into long positions in the expectation of continuing the upward trend. If there is no activity of buyers, I recommend postponing long positions until the test of the minimum in the area of 1.2110, from where you can buy the euro immediately on the rebound 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 did not particularly rest in the resistance area of 1.2149, which was tested for strength almost all last week. Now trading is conducted above this range and the initial task of sellers is to return EUR/USD to this level, which will seriously affect the upward trend that we observed today in the first half of the day. However, only a bottom-up test of the level of 1.2149 forms a signal to enter the market with the main target of returning to the support area of 1.2110, from the breakdown of which the further direction of the pair will depend. The reversal of the upward trend will occur only after the breakout of the level of 1.2110, which will quickly push EUR/USD to a minimum in the area of 1.2069, where I recommend taking the profits. If during the US session we will continue to observe the upward trend of the euro, 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 the 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 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 quick 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 above 30 and 50 daily moving averages, which indicates an attempt by the bulls to resume the upward 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 a decline in the pair, the lower limit of the indicator in the area of 1.2220 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.