EUR/USD – 1H.
On February 10, the EUR/USD pair stopped its growth process after closing above the corrective level of 38.2% (1.2104). However, this daily pause does not cancel the upward trend. Yesterday, there were no important economic reports, however, there was a speech by Christine Lagarde. Unfortunately, this was just an online interview with one magazine. But there is still something. The most important thing that the ECB chairwoman shared is the information that, if necessary, the bank will expand the emergency program of buying up PEPP assets, which is currently approaching 2 trillion euros. Lagarde again called on the European Parliament and the European Commission to start forming the 750 billion euro economic recovery fund, which was approved last year, as soon as possible. Generate and distribute it among the countries that have been most affected by the pandemic and the economic crisis it has caused. The head of the ECB also said that EU countries will have to maintain high levels of spending in 2021 to stimulate economic growth and not allow the economy to fall back into recession. Let me remind you that Lagarde believes that investing in the economy is the best way to overcome the crisis and recently abandoned the idea of writing off debts to European companies as a measure to combat the consequences of the economic crisis. Thus, the ECB keeps its finger on the pulse and is ready to step in with new incentives at any time. However, there is no talk of lowering the key rate, since it is already at a negative level. Consequently, the ECB can now only expand its stimulus programs. For the euro, this is a "bearish" factor, but bull traders continue to pull the pair up, probably not because of events in the EU, but because of what is happening in the US, where the impeachment procedure of Donald Trump began, and Joe Biden's plan to rescue the economy may also be adopted in the near future.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes completed a close above the downward trend line, so the mood of traders changed to "bullish". Thus, the growth process can be continued in the direction of the level of 1.2204. Today, the divergence is not observed in any of the indicators.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed a breakdown of the lower border of the upward trend corridor, which turned out to be false. Therefore, at the moment, the pair has performed a reversal in favor of the euro and resumed the growth process in the direction of the corrective level of 423.6% (1.2496).
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has made a consolidation above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On February 10, the European Union and the United States hosted speeches by Christine Lagarde and Jerome Powell, and the inflation rate in America fell slightly in January.
News calendar for the United States and the European Union:
EU - economic forecast from the European Commission (10:00 GMT).
US - number of initial and repeated applications for unemployment benefits (13:30 GMT).
On February 11, the forecast for the economy from the European Commission and the report on applications for unemployment benefits in the United States will be released.
COT (Commitments of Traders) report:
Last Friday, another COT report was released. Let me remind you that the European currency has been losing ground over the past week. Therefore, the weakening of the "bullish" mood in the category of "Non-commercial" traders is quite understandable. However, speculators at the end of the reporting week closed as many as 23 thousand long contracts and at the same time increased 11 thousand short-contracts. Thus, their mood became more "bearish". Nevertheless, the growth of the euro currency quotes last Friday and earlier this week indicates that speculators may have rushed with a massive sell-off of the euro.
Forecast for EUR/USD and recommendations for traders:
It was recommended to buy the euro currency with the targets of 1.2151 and 1.2197 on the hourly chart when closing quotes above the descending trend line on the 4-hour chart. Now, these positions can be maintained. I do not recommend opening sales today.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
