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FX.co ★ EUR/USD: plan for the US session on February 25 (analysis of morning trades)

EUR/USD: plan for the US session on February 25 (analysis of morning trades)

To open long positions on EURUSD, you need to:

In the first half of the day, I paid attention to the resistance level of 1.2178 and expected to open short positions from it. Let's look at the 5-minute chart and talk about what happened. The formation of a false breakout and a return to the level of 1.2178 formed a signal to open short positions, however, this did not lead to a normal downward movement. Then another breakout of the resistance of 1.2178 took place, however, I did not wait for the reverse test of this level from the reverse side and was forced to miss the growth to the resistance of 1.2220. Sales on the rebound from this level led only to a downward correction of 11 points, after which the euro continued its growth.

EUR/USD: plan for the US session on February 25 (analysis of morning trades)

Buyers of the euro took advantage of the good fundamental data on Germany and the eurozone and pushed the pair above 1.2178. In the second half of the day, the focus will be on the new level of 1.2220 and on the test of this area from the bottom up, which will form a new signal to buy the euro. The next target will be a maximum of 1.2260, where I recommend fixing the profit. The further level is now seen in the area of 1.2305. If the pressure on the euro returns during US trading, and the pair moves back under the area of 1.2220, then it is better to postpone long positions until the update of the larger minimum of 1.2178, 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:

Above the level of 1.2178, it turned out to be empty, just like those who want to sell on a false breakout from this range. The bears did something in the resistance area of 1.2220, however, this was not enough to stop the new bullish momentum. The primary task of sellers will be to return the level of 1.2220 under control. A test of this area on the reverse side will lead to the formation of a signal to open short positions to return to the support area of 1.2178, where I recommend taking the profits. In the scenario of further growth of the pair, it is best to consider selling the euro after updating the next major resistance at 1.2260, where you can open short positions immediately on a rebound in the expectation of a downward correction of 20-25 points within the day. The next major sales level is seen in the area of 1.2305. However, you need to understand that selling against the trend is not a good idea, so be careful with short positions today.

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EUR/USD: plan for the US session on February 25 (analysis of morning trades)

Let me remind you that in the COT report (Commitment of Traders) for February 16, there were no special changes in the positions of major players, which once again indicates the temporary equilibrium of the pair before a new wave of its growth in the spring of this year. Another major decline of the pair down last week was played out, and this once again confirms the theory that the US dollar continues to be less in demand among investors. Therefore, a more correct approach to the market should be to buy the European currency on the average market. A good plus for the euro will be the moment when the European countries will begin to actively curtail quarantine and isolation measures, and the service sector will once again work in full force, which will lead to an improvement in economic prospects and also strengthen the EUR/USD pair. The COT report shows that long non-profit positions rose from 220,943 to 222,895, while short non-profit positions rose from 80,721 to 82,899. As a result, the total non-profit net position declined slightly after rising last week from 140,006 to 140,222. The weekly closing price was 1.2132 against 1.2052 a week earlier, indicating the presence of buyers in the market.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which indicates the resumption of the bull 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

In the case of a decline in the pair, the average border of the indicator in the area of 1.2178 will provide 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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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