FX.co ★ Trading plan for EUR/USD on February 8th

Main trade idea:

Yesterday, I presented a trade idea to buy the euro in case of a bounce from the corrective level of 100.0% (1.0725). At the moment, I cannot consider this trading signal completely worked out. The European currency is showing a slight increase, and the current profit from the open trade is about 40 points. Since there have been two bounces from the 1.0725 level, I continue to expect the rise of the European currency.

It is also important to note the almost complete absence of an information background. Yesterday, Harker and Barkin from the FOMC made several favorable statements for the US dollar, but traders ignored them. Today, the information background will also be absent. The only report of the day on US unemployment claims is unlikely to bring the pair back to 1.0725 even with a strong reading.

After a sharp decline in the euro, an upward correction remains quite likely, but the nearest level of 1.0823, is still 40 points away for bulls. Bears continue to maintain leadership in the market, so downward waves should be stronger than upward waves until trader sentiment changes to "bullish." Nevertheless, counting on a small rise in the euro is still possible.

On the 4-hour chart, the pair consolidated below the corrective level of 38.2% (1.0765), but the "bullish" divergence on the CCI indicator allowed for the start of growth. In combination with the bounce from the 1.0725 level on the hourly chart, we received two signals to buy. Yesterday, the pair also closed above the 1.0765 level, increasing the likelihood of the euro's continued rise. As I mentioned before, one can only count on a correction now, which indicates a weak potential for the pair's growth. The divergence is also corrective. Nevertheless, under certain circumstances, one can expect the pair to rise to the upper line of the descending trend corridor. Then I will be looking for new sell signals.

Alternative scenario:

"Backup" scenarios for today are not relevant. The bounce from the 1.0725 level has already been executed, the pair is rising, and trades are open; now it is necessary to first get rid of long positions, and only then consider other signals. In the near future, consolidation below the 1.0725 level or bounces from the 1.0823 level or the upper line of the descending trend corridor on the 4-hour chart could become such signals.

Forecast for EUR/USD and trader advice:

Today, I expect the continuation of the rise of the European currency. I believe that the rise will not be strong, but one can expect a profit of 50-80 points from the 1.0725 level. There is no information background today, so nothing should interfere with the corrective rise of the euro.