Morning Star pattern ready for confirmation

Hi, dear traders!

Yesterday, the eurozone's GDP data for the fourth quarter of 2021 were published. The European economy expanded by 0.3% quarter-over-quarter, meeting expectations. Annual GDP growth reached 4.6%, falling short of the projected 4.7% increase.

Furthermore, Germany's CPI data was released on Monday. German consumer prices has exceeded market expectations.

Today, unemployment data for Germany and the eurozone will be released, followed by the ISM manufacturing PMI in the US.

Monthly

EUR/USD finished January's trading without clear indications of its future trajectory. The candlestick has a long lower shadow and performed a false breakout below support at 1.1223 and 1.1187 - the lows of the past 2 months. The candle still has an upper shadow, and candlestick analysis suggests the pair could advance during February's trading.

Daily

According to the daily chart, a Morning Star reversal pattern has emerged as a result of yesterday's upward movement of EUR/USD - it is highlighted above. Its confirmation would depend on numerous factors, such as the tone of statements by ECB president Christine Lagarde and Friday's US labor market reports.

At the moment of this article, the pair was testing the red Tenkan-Sen line of the Ichimoku cloud. A breakout through the Tenkan-Sen line would allow the pair to rise further, with the next targets being the lower boundary of the Ichimoku cloud at 1.1288 and the blue Kijun-Sen line at the key level of 1.1300. Technical factors indicate EUR/USD is likely to rise further, allowing traders to open long positions. However, observing the pair's performance during today's session could be the best course of action. If EUR/USD closes in positive territory, it would improve the chances of the successful confirmation of the Morning Star pattern.

Good luck!