22.02.202409:19 Forex Analysis & Reviews: Technical Analysis of EUR/USD for February 22, 2024

EUR/USD Ascends Amidst Global Sentiment Swings: Will the Bulls Charge Through Resistance?

Key Takeaways:

• EUR/USD faces resistance at the 100 MA, with the potential for continued bullish momentum within the established channel.
• Fundamental data points to a mixed sentiment, with Asian markets showing strength and the RBNZ indicating rising inflation expectations.
• Technical indicators remain predominantly bullish, but caution is warranted near pivotal points.

The EUR/USD pair has shown resilience in recent trading sessions, as indicated by the bullish engulfing patterns within an ascending channel. However, the latest rejection at the 100 MA suggests that bulls may need to gather additional strength to sustain the upward trajectory.

Morning Fundamental Brief:

Asian and Pacific market sentiment today has been notably bullish, with Japan's Nikkei 225 hitting new all-time highs. European futures also point towards a positive open. In contrast, Nvidia's better-than-expected financial results have provided a bullish twist to Wall Street's previous session, signaling potential higher openings for U.S. markets.

Key events for the day include February PMI data, the eurozone HICP inflation report, the CBRT interest rate decision, ECB minutes, U.S. unemployment claims, changes in U.S. oil and gas inventories, and multiple Fed bankers' speeches. The BOJ Governor's acknowledgment of rising inflation and policy implications, along with the Reuters survey hinting at a shift from negative interest rates by the BOJ, add to the complex fundamental backdrop.

Technical Analysis:

The H4 chart for EUR/USD reveals a well-established upward trend within a channel pattern. However, the price has been rejected at the 100 MA, a crucial resistance level. The Relative Strength Index (RSI) is hovering around the midpoint, suggesting no clear overbought or oversold conditions at the moment.

Indicator Analysis: Nearly all technical indicators and moving averages are flashing buy signals, aligning with the bullish sentiment observed on the sentiment scoreboard over the last week and the neutral sentiment from the past three days.

Pivot Points Analysis: The weekly pivot points serve as critical junctures for the pair's direction. While the price remains above the weekly pivot, the immediate resistance levels WR1 through WR3 provide targets for bullish momentum. Conversely, a drop below the pivot could see the pair seeking support at WS1 through WS3, with WS2 being particularly pivotal due to its proximity to the DEMA 50.

Market Scenarios:

• Bullish Scenario: A sustained move above the 100 MA could lead the pair to test the supply zone at 1.0839. A break above the WR2 pivot at 1.07970 could reinforce this bullish outlook.
• Bearish Scenario: Should the pair fail to hold above the weekly pivot at 1.07824, a move towards the WS1 at 1.07756 could occur, potentially indicating a shift in sentiment to the downside.

Conclusion:

The EUR/USD pair's current technical setup, combined with a cautiously optimistic fundamental outlook, suggests the potential for continued bullish movements. However, traders should remain vigilant for shifts in sentiment, as indicated by key pivot points and global economic events.

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Important Notice

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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