FX.co ★ Technical Analysis of EUR/USD for February 15, 2024

EUR/USD Bounce From The Support, Upside Limited

Key Insights:

1. Economic Data Impact: Recent weak employment data from Australia and unexpected GDP contraction in Japan signal cautious market sentiment. Upcoming US retail sales and industrial production data will be pivotal in shaping short-term forex market trends.
2. Technical Positioning: The EUR/USD pair shows a tentative recovery attempt from 1.0696. However, its upside is constrained by technical resistances at 1.0723 and 1.0746. The H4 chart exhibits weak, negative momentum, suggesting a bearish bias in the near term.
3. Sentiment and Indicators: Current market sentiment leans bullish, with a majority favoring the Euro. However, technical indicators on the H1 chart present a mixed outlook, with a relatively even distribution between buy and sell signals, indicating potential market volatility and the need for cautious trading strategies.

Morning Brief:

Global markets are witnessing varied movements. Wall Street indices saw a positive close, with S&P 500 and Nasdaq 100 contracts rising by approximately 0.90-1.00%. Conversely, Asia-Pacific indices present a mixed picture. The Nikkei remains stable, while the Australian S&P/ASX 200 climbed by 0.34% and Chinese indices dipped slightly.

European futures suggest a modestly lower opening. In the forex market, the Japanese yen leads among the G10 currencies in early trading, whereas the Australian dollar lags. The USDJPY pair shows a modest decline to 150.100.

Employment and Economic Data Insights:

Australia's labor market displays signs of slowing down, with January's employment only slightly up and the unemployment rate reaching a two-year high at 4.1%. Japan's economy, unexpectedly contracting in Q4 2023, coupled with UK's similar recessionary status, paints a cautious economic picture.

Attention shifts to the US in the day's latter half, with retail sales and industrial production data due. Retail sales, a key indicator of consumer health, are anticipated to show a monthly decline.

Key Economic Data:

• Spain's inflation data, with CPI expected at 0.1% m/m and 3.4% y/y.
• US employment data, forecasting unemployment benefit applications at 219,000.
• US retail sales expected to show a -0.2% monthly change.
• Industrial production in the US, with a 0.2% m/m forecast.

Bankers' Speeches:

• ECB's Lane, BoE's Mann, and ECB's Nagel are scheduled to speak, potentially influencing market sentiments.

Technical Market Outlook:

EUR/USD is attempting a recovery from the recent low at 1.0696. However, gains are capped by resistances at 1.0723 and 1.0746. Support lies at 1.0696 and 1.0676. The H4 chart's weak and negative momentum suggests a short-term bearish outlook.

H4 Time Frame Technical Insights:

• Candlestick Patterns: Hammer indicates potential bullish reversal. Harami and Bearish Engulfing suggest market indecision and bearish sentiment, respectively.
• Moving Averages: Price is below the EMA 100, indicating resistance, and around the DEMA 50, which may act as support.
• RSI: At around 46.45, it shows neither overbought nor oversold conditions.

EUR/USD H1 Intraday Indicator Analysis:

• Technical indicators: 14 out of 22 signal Buy, 3 Sell, 7 Neutral.
• Moving averages: 7 signal Sell, 11 Buy.

Sentiment Scoreboard:

Overall sentiment is bullish (59% bulls vs. 41% bears). Weekly sentiment remains bullish, while the last three days are neutral.

Weekly Pivot Points:

• Resistance levels: WR3 - 1.08296, WR2 - 1.08114, WR1 - 1.07992.
• Pivot: 1.07932.
• Support levels: WS1 - 1.07810, WS2 - 1.07750, WS3 - 1.07568.

Trading Insights:

Bullish Scenario: A break above the EMA 100 and sustained DEMA 50 positioning could signal upward momentum. A hammer pattern suggests potential buying interest, with targets at previous highs or upper channel lines.

Bearish Scenario: A drop below the DEMA 50, potentially retesting previous supports, coupled with bearish engulfing patterns, could indicate a downtrend continuation. Targets may include lower channel lines or support levels.

Useful Links

• More Artcles
• InstaForex Course for Beginners
• Open Trading Account

Important Notice

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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