EUR/USD: EUR is near monthly highs 23 February 2021, 09:03

EUR/USD: EUR is near monthly highs

23 February 2021, 09:03

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	1.2205
Take Profit	1.2309
Stop Loss	1.2150
Key Levels	1.2022, 1.2052, 1.2100, 1.2150, 1.2200, 1.2234, 1.2271, 1.2309

Alternative scenario
Recommendation	SELL STOP
Entry Point	1.2145
Take Profit	1.2052
Stop Loss	1.2200
Key Levels	1.2022, 1.2052, 1.2100, 1.2150, 1.2200, 1.2234, 1.2271, 1.2309

Current trend

EUR is marginally strengthening against USD during today's Asian trading session, updating its local highs since January 25. Investors are selling USD by inertia, awaiting the emergence of new drivers in the market, which may be Jerome Powell's speech in the US Congress and the vote on the aid package for the US economy in the amount of USD 1.9 trillion in the House of Representatives. In addition, analysts expect further recovery in US bond yields, which, together with correction on stock markets, may also provide significant support to USD.

EUR, in turn, received support after yesterday's publication of macroeconomic statistics from Germany. IFO Business Climate Index in February rose from 90.3 to 92.4 points against the forecast of growth only up to 90.5 points. IFO Expectations jumped from 91.5 to 94.2 points, significantly exceeding the expected 91.8 points.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is narrowing, reflecting quite a sharp change of trend in the short/middle term. MACD indicator is growing preserving a rather stable buy signal (located above the signal line). In addition, the indicator is trying to consolidate above the zero level. Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought EUR in the ultra-short term.

Resistance levels: 1.2200, 1.2234, 1.2271, 1.2309.

Support levels: 1.2150, 1.2100, 1.2052, 1.2022.

Trading tips

To open long positions, one can rely on the breakout of 1.2200. Take-profit – 1.2309. Stop-loss – 1.2150. Implementation time: 1-2 days.

A rebound from 1.2200 as from resistance, followed by a breakdown of 1.2150 may become a signal for new sales with the target at 1.2052. Stop-loss – 1.2200.