Forecast and trading signals for EUR/USD on February 11. COT report. Analysis of Wednesday. Recommendations for Thursday

EUR/USD 1H

analytics6024923f66f2a.jpg

The euro/dollar pair continued a slight upward movement, crossed the downtrend line and eventually reached the resistance level of 1.2139 on the hourly timeframe. So now we have an upward trend, but we advise you to take note of that moment where the price went up by 190 points in an almost recoilless manner. Therefore, there is a high probability of a downward pullback even though the trend line has been broken. Also, buyers failed to overcome the 1.2139 level in two attempts, so the downward movement will seem logical. In our last review, we advised you to buy the pair while aiming for 1.2139 and 1.2158 if the trend line is broken. This signal was generated, so traders could open long positions. Unfortunately, volatility was extremely low yesterday, so the best that traders could earn was 20 points. We also advised you to trade bearish if a rebound occurs from the trend line. And a rebound occurred. But it turned out to be false, so traders could get a loss on this deal - also 20 points. In general, hardly anyone could make money in such a market since volatility is low and there was no trend on Wednesday.

EUR/USD 15M

analytics602474dbc03b2.jpg

Both linear regression channels are directed to the upside on the 15-minute timeframe. However, the price has not yet surpassed the 1.2139 level. If this happens, then the upward movement can continue. So far, we can say that the first rebound from this level did not provoke a downward movement. There was no rebound at all during the second time. Therefore, the data of the 15-minute timeframe speaks in favor of continuing the slight upward movement.

COT report

analytics602474e5ab59f.jpg

The EUR/USD pair fell by 80 points during the last reporting week (January 26 - February 1). Therefore, we can expect professional traders to slightly reduce their demand for the euro, since the dollar has been rising for four consecutive weeks. However, the new Commitment of Traders (COT) report was a real surprise, which needs to fit into the overall picture of things for the euro/dollar pair. During the reporting week, the most important group of non-commercial traders opened almost 11,000 sell contracts (shorts) and closed (!!!) 23,000 buy contracts (longs). Considering that we concluded that the upward trend is likely to continue, this behavior of major players does not fit with it at all. However, as we have already said, any assumption or hypothesis must be confirmed by technical factors and signals. Therefore, for now, these are just numbers. Figures indicate a 34,000 decline in the net position of non-commercial traders. This means that they have significantly become more bearish. But does this mean that the euro will continue to fall? Is demand falling in parallel for the US dollar, which is not included in the COT reports? We believe that this is exactly the case when the report data needs to be compared with the technical picture. For example, a rebound has occurred on the 24-hour timeframe from the Senkou Span B line and the 50.0% Fibonacci level. Thus, there are high chances of growth for the pair, and the COT report contradicts this, so we do not take it into account for now. But if the Senkou Span B line is crossed, then the data of the technique and the COT reports will coincide and a new long-term downward trend can be expected.

Federal Reserve Chairman Jerome Powell was set to speak in America, and European Central Bank President Christine Lagarde in the European Union. We look at the volatility index for the past day, which is no more than 40 points, and we understand that Lagarde and Powell talked about football, fishing, anything but monetary policy and economics. They did not mention anything interesting. Thus, the foundation had no effect on the mood of traders on Wednesday.

The European Union is set to publish an economic forecast from the European Commission on Thursday. But this event can hardly be called important. These projections change every few months. It goes up and down and does not give any reason to assume that everything will be so, especially in the context of the global crisis and pandemic. The Fed's monetary policy report will be also published, and it is as unimportant to the markets as the ECB's forecast for the economy. Thus, fundamentally, it is unlikely for anything to change today.

We have two trading ideas for February 11:

1) Buyers seized the initiative in the market and broke the upward trend line, but immediately rested on the 1.2139 level. Thus, we recommend buying the pair in case the price settles above the 1.2139 level with targets at 1.2158 and 1.2190. Take Profit in these cases can be up to 50 points. However, you should also take the low volatility into account. You can also open long positions when the price rebounds off the Senkou Span B line while aiming for 1.2111 and 1.2139.

2) Bears were unable to bring back the pair's downward movement. Therefore, short positions have lost their relevance right now. We advise trading bearish if the price surpasses the Kijun-sen line with 1.2004 and 1.1955 as the initial targets. Take Profit in this case can be up to 75 points.

Forecast and trading signals for GBP/USD

Explanations for illustrations:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

Indicator 1 on the COT charts is the size of the net position of each category of traders.

Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group.

The material has been provided by InstaForex Company - www.instaforex.com