FX.co ★ EUR/USD. February 21st. Awaiting the FOMC minutes

The EUR/USD pair continued its upward movement on Tuesday towards the corrective level of 76.4% (1.0823). The rebound of the pair's exchange rate from this level allows counting on a reversal in favor of the US currency and some decline towards the levels of 1.0785 and 1.0725. The rise of the European currency is still not strong, but market sentiment has begun to change to "bullish." The consolidation of the pair's exchange rate above the level of 1.0823 increases the probability of further growth towards the next corrective level at 61.8% (1.0883).

The wave situation is becoming clearer. The last completed downward wave confidently broke the low of the previous wave, and the new upward wave broke the peak of the previous wave (from February 12). Thus, the first sign of the completion of the "bearish" trend has appeared. If this is the case, in the next few weeks, bullish traders may attack more actively than before, although, for example, this week the information background is so weak that it is quite difficult for me to assume based on which data the bulls are going to launch an attack. In my opinion, the rise of the European currency is far from one hundred percent, but it cannot fall forever either.

There was no information background on Tuesday, and today the situation will be slightly better. Only late in the evening in the United States, the FOMC minutes from the January meeting will be released, which may contain interesting information. Since the regulator decided to leave interest rates unchanged, it can be assumed that the tone of the minutes will be "hawkish." At present, none of the Board members support a reduction in the interest rate. However, I also want to remind you that FOMC minutes rarely affect trader sentiment, and they rarely contain unknown information about the market. Thus, I recommend reviewing them, but even tonight, I do not expect high trader activity.

On the 4-hour chart, the pair has risen to the upper line of the descending trend channel and has consolidated above it. Thus, we have another sign of a trend change to "bullish." Now the upward movement can be continued towards the corrective level of 50.0% (1.0862). There are no impending divergences in any of the indicators. The information background does not support buyers, but for some time, they can attack based on graphical factors. A rebound from the level of 1.0862 will work in favor of the US currency and some decline in quotes.

Commitments of Traders (COT) report:

In the last reporting week, speculators opened 8398 long contracts and 17713 short contracts. The sentiment of large traders remains "bullish" but continues to weaken. The total number of long contracts concentrated in the hands of speculators now amounts to 210 thousand, and short contracts - 158 thousand. I still believe that the situation will continue to change in favor of bears. Bulls have dominated the market for too long, and now they need a strong information background to maintain the "bullish" trend. I don't see such a background now. Professional traders may continue to close long positions (or open short positions) soon. I believe that the current figures allow for a continuation of the decline in the euro in the coming months.

News calendar for the US and the Eurozone:

US – FOMC Meeting Minutes (19:00 UTC).

On February 21, the economic events calendar contains only one entry. The impact of the information background on trader sentiment today will be very weak.

EUR/USD forecast and trader tips:

Sales of the pair are possible today on a rebound from the level of 1.0823 on the hourly chart with targets at 1.0785 and 1.0725. Purchases of the pair will be possible with consolidation above the descending trend corridor on the 4-hour chart with targets at 1.0823 and 1.0862. The first target has been reached. New purchases - with a close above 1.0823 with a target of 1.0883.