To open long positions on EURUSD, you need to:

In my morning forecast, I paid attention to the level of 1.2041 and recommended actions based on it. Let's look at the 5-minute chart and talk about what happened. It is visible how the bears achieve a breakout of the level of 1.2041, and after a while, it is tested from the bottom up, which forms a signal to open short positions in the continuation of the downward trend. At the time of writing, the bulls are trying to regain control of the level of 1.2041. We'll find out what happens in the near future. The formation of a false breakout will only confirm the correctness of entering short positions.

If buyers manage to regain control of the level of 1.2041, its reverse test will form a good entry point into long positions with the aim of an upward correction to the resistance area of 1.2087, just below which the moving averages play on the side of sellers. A breakout and a test of the level of 1.2087 from top to bottom forms an additional buy signal in the expectation of continuing the growth of the pair to the resistance of 1.2138, where I recommend fixing the profit. The further level will be the area of 1.2190. If there is no bull activity in the support area of 1.2041 in the second half of the day, I recommend postponing purchases until the test of a larger minimum of 1.1994, from which you can open long positions immediately for a rebound based on an upward trend of 25-30 points within the day. Even weak fundamental statistics on the US economy can keep the market bearish, so I do not recommend rushing to open long positions in the euro.

To open short positions on EURUSD, you need to:

The bears tried to break below the level of 1.2041 and even formed a good entry point into short positions. However, the market did not go down but froze in the area of 1.2041. The formation of a false breakout and a return to this level will only confirm the presence of large sellers in the market, counting on a further fall in the euro. In this case, we can expect a continuation of the downward trend to reduce it to the support level of 1.1994, where I recommend taking the profit. This scenario will be realized in the case of very good fundamental data on the US economy and another increase in US bond yields. A break of the level of 1.1994 will lead to a larger decline in EUR/USD with an exit to the minimum of 1.1952, where I recommend taking the profit. If in the second half of the day we continue to observe an upward correction, and the bears do not show activity in the resistance area of 1.2041, it is best to postpone short positions until the test of the 1.2087 area, just below which the moving averages are playing on the side of sellers. From there, you can sell EUR/USD immediately for a rebound to reduce by 20-25 points within the day. The next major resistance is seen around 1.2138.

Let me remind you that in the COT report (Commitment of Traders) for February 23, there were no special changes in the positions of large players, however, the growth of short positions shows how the advantage of buyers is beginning to melt. This time, it was not possible to quickly win back another major decline in the pair, which we have seen since the middle of last week. The sharp rise in bond yields of many developed countries plays in favor of the US dollar, as investors expect that the United States will be the first to start raising interest rates, which makes the US dollar more attractive. Buyers of risky assets should not rush to return to the market, and it is better to wait for lower prices. A good plus for the euro will be the moment when European countries begin to actively curtail quarantine and isolation measures: Germany has already announced its plan in this direction, however, it has not yet come to the point. It is also necessary to wait for the moment when the service sector will start working again in full force, which will lead to an improvement in the economic prospects and also strengthen the EUR/USD pair. The COT report shows that long non-profit positions rose to the level of 228,501 from the level of 222,895, while short non-profit positions rose from the level of 82,899 to the level of 90,136. As a result, the total non-profit net position declined again for the second week in a row to 138,365 from 140,006. The weekly closing price was 1.2164 against 1.2132 a week earlier.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily moving averages, which indicates that the pressure on the pair remains.

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

A break of the lower limit of the indicator in the area of 1.2035 will lead to a new wave of decline in the euro.

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.