In my morning forecast, I highlighted the 1.0324 level as a key decision point for market entries. Looking at the 5-minute chart, the initial rise and a false breakout at 1.0324 provided a good short entry opportunity. However, at the time of writing, the expected decline had not materialized. The technical outlook remains unchanged for the second half of the day.

To open long positions on EURUSD, you need:

Similar price action, similar movement. The lack of economic data once again helped the euro recover slightly, but overall, selling pressure remains strong. Market sentiment will now depend on statements from Federal Reserve officials Fed Chair Jerome Powell, Michelle Bowman, and John Williams.

If EUR/USD declines following a more cautious stance from the Fed, I will only consider long positions after a false breakout at 1.0287, providing a buy entry targeting 1.0324 resistance. A breakout and retest of 1.0324 will confirm a stronger bullish signal, potentially driving the pair toward 1.0358. The furthest target will be a maximum of 1.0400, where I will lock in profits.

If EUR/USD drops below 1.0287 without buyer interest, euro bulls will lose control, and the pair could fall toward 1.0247. Only a false breakout at 1.0247 would provide a buying opportunity. Immediate buy orders will only be placed at 1.0216, targeting a 30-35 point intraday correction.

To open short positions on EURUSD, you need:

Bears were active at 1.0324, but a major sell-off didn't follow, indicating that large players are waiting. The best strategy remains selling from 1.0324. A false breakout at this level would confirm the presence of strong sellers, allowing entry with a target at 1.0287. This support level holds strong technical significance.

A breakout and consolidation below 1.0287, followed by a retest from below, would provide a stronger sell signal, targeting 1.0247 (new daily low). The furthest target will be the 1.0216, where I will lock in profits.

If EUR/USD rises in the second half of the session and bears fail to defend 1.0324, buyers may push the pair higher. Sellers should wait for a test of 1.0358. A failed breakout at 1.0358 would provide an ideal selling opportunity. Immediate short orders will be placed only at 1.0400, targeting a 30-35 point correction.

The Commitment of Traders (COT) report from February 4 showed an increase in short and long positions. Buying interest in the euro rose as fears over a U.S. trade war eased. However, the report does not reflect the impact of the strong U.S. jobs report and new U.S. tariffs on steel and aluminum. Caution is advised when buying risk assets, as the trade war is still unfolding.

The COT report indicates that Non-commercial long positions increased by 8,894 to 162,554. Non-commercial short positions increased by 904 to 221,168. Thus, net positioning narrowed by 3,058.

Technical Indicator Signals

Moving Averages

EUR/USD is trading below the 30 and 50-period moving averages, signaling further downside potential.

Note: Moving average periods differ from traditional daily (D1) moving averages, as they are based on the hourly (H1) timeframe.

Bollinger Bands

The lower Bollinger Band at 1.0287 serves as intraday support.

Indicator Descriptions:

• Moving Average (MA 50) – Smoothing out price volatility and identifying trends (Yellow line).
• Moving Average (MA 30) – Smoothing out price volatility and identifying trends (Green line).
• MACD Indicator –
  • Fast EMA (12-period)
  • Slow EMA (26-period)
  • Signal SMA (9-period)
• Bollinger Bands (20-period) – Identifying overbought/oversold conditions.
• Non-commercial traders – Speculative investors, hedge funds, and large institutions using futures for speculative purposes.
• Long non-commercial positions – Total buy-side positions held by speculative traders.
• Short non-commercial positions – Total sell-side positions held by speculative traders.
• Net non-commercial position – The difference between long and short speculative positions.