07.02.202413:10 Forex Analysis & Reviews: Trading plan for EUR/USD on February 7th

The main trading idea:

Yesterday, I presented to you a trade idea to buy the euro in case of a rebound from the corrective level of 100.0% (1.0725). At the moment, I cannot consider this trading signal as executed. A slight increase in the European currency occurred, but it was too small. In the middle of the day, the pair returned to the level of 1.0725 against the backdrop of weak statistics from the European Union. However, bears could not consolidate below the level of 1.0725. The buy signal was not canceled, and a new rebound was formed shortly after. At the moment, we have two trading signals to buy at the same level.

After a two-day decline, an upward correction of the euro is quite likely, but the nearest level is 1.0823, and I doubt that it will be reached by bulls today. Bears continue to maintain leadership in the market, so downward waves should be stronger than upward waves until trader sentiment changes to "bullish." However, a slight increase can be expected today, and profit can be made from it.

The information background will be absent today. Yesterday, the information background worked against the bulls, but today, nothing should prevent them from lifting the pair a bit higher. If they fail to do so, we should expect a new decline in the European currency with consolidation below 1.0725.

On the 4-hour chart, the pair consolidated below the corrective level of 38.2% (1.0765), but the "bullish" divergence of the CCI indicator allows us to expect some growth. In combination with the rebound from the level of 1.0725 on the hourly chart, we have received two buy signals. As I have already mentioned, at the moment, we can only count on a correction, which means a weak potential for the growth of the European currency. The divergence is also corrective. However, under certain circumstances, the pair may rise to the upper line of the descending trend corridor. Nevertheless, this week, it is better to look for new sell signals until bears go back to sleep.

Alternative scenario:

The alternative scenario today involves the pair consolidating below the level of 1.0725. However, this scenario is quite complicated. Currently, the euro is showing growth and may continue to do so for part of the day. Thus, before consolidating below 1.0725, the pair may move up and then move down for quite some time. In this case, by the time of closing below 1.0725, most of the "bearish" impulse will be exhausted. Therefore, when forming a sell signal, it may take several days to wait for the target of 1.0644 to be achieved.

Forecast for EUR/USD and trader advice:

Today, I expect the growth of the European currency, as two buy signals have already formed. I believe that the growth will be limited, but from the level of 1.0725, you can expect a profit of 50–60 points. The information background is absent today, and nothing should interfere with the corrective growth of the euro.