EUR/USD: EUR is strengthening 09 February 2021, 08:43

 

EUR/USD: EUR is strengthening

09 February 2021, 08:43

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	1.2090
Take Profit	1.2150
Stop Loss	1.2052
Key Levels	1.1900, 1.1951, 1.2000, 1.2052, 1.2087, 1.2120, 1.2150, 1.2200

Alternative scenario
Recommendation	SELL STOP
Entry Point	1.2050
Take Profit	1.1951
Stop Loss	1.2100
Key Levels	1.1900, 1.1951, 1.2000, 1.2052, 1.2087, 1.2120, 1.2150, 1.2200

Current trend

EUR has seen significant gains against USD during today's Asian session, approaching the next major resistance at 1.2100. EUR is again supported by rather weak positions on USD, which ignored the strong report on the US labor market for January, released at the end of last week.

In turn, the fundamental background in the market changes slightly, and in almost every case EUR is not in a winning position. Investors are extremely negative about the continuation of restrictive measures due to the coronavirus pandemic, and also question the region's ability to quickly catch up in the vaccine race.

The approval of the candidacy of Mario Draghi (the former ECB President) as the interim Prime Minister of Italy may be considered as one of the most optimistic signals. Markets are pinning high hopes on Draghi, expecting his leadership to help Italy deal with the chaos in the political system.

Support and resistance

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is narrowing, indicating the emergence of corrective uptrend. MACD indicator is growing preserving a weak buy signal (located above the signal line). Stochastic also demonstrates uptrend but is approaching its highs rapidly, which reflects risks of the overbought EUR in the nearest future.

Technical indicators do not contradict the further growth of the instrument in the short and/or ultra-short term.

Resistance levels: 1.2087, 1.2120, 1.2150, 1.2200.

Support levels: 1.2052, 1.2000, 1.1951, 1.1900.

Trading tips

To open long positions, one can rely on the breakout of 1.2087. Take-profit – 1.2150. Stop-loss – 1.2052. Implementation time: 1-2 days.

A rebound from 1.2087 as from resistance followed by a breakdown of 1.2052 may become a signal for new sales with the target at 1.1951. Stop-loss – 1.2100.