In my morning forecast, I focused on the 1.0827 level as a key point for market entry. Let's analyze the 5-minute chart and see what happened. The price did decline, but there was no formation of a false breakout, nor did a retest occur. As a result, I remained out of trades. For the second half of the day, the technical outlook has been adjusted.

Long Position Strategy for EUR/USD:

The euro reacted positively to better-than-expected industrial production data from Germany, which strengthened EUR/USD buyers. Unfortunately, there are no scheduled U.S. economic releases in the second half of the day, meaning dollar bulls lack support, favoring further upside for the pair.

If there is a bearish reaction, defending support at 1.0807 (formed during the European session) will be a top priority for buyers. I plan to go long only after a false breakout, aiming for a rise to 1.0868 resistance. A break and retest of this range will confirm a buy entry, setting the stage for a rally toward 1.0901. The final target will be 1.0935, where I will take profit.

If EUR/USD declines and buyers fail to hold 1.0807, which could happen following any unexpected comments from the Trump administration, demand for the euro may weaken, leading to a range-bound phase. Sellers will then aim for 1.0770, where I will consider long positions only after a false breakout. Alternatively, I plan to buy on a direct rebound from 1.0743, targeting a 30–35 pip intraday correction.

Short Position Strategy for EUR/USD:

Sellers attempted to gain control, but strong risk appetite and solid German data prevented any significant decline at the start of the week.

If the pair continues to rise, only a false breakout near 1.0868 will provide an entry for short positions, aiming for a pullback to 1.0807 support. A break and consolidation below this range would create a stronger sell signal, pushing the pair down toward 1.0770. The final downside target will be 1.0743, where I plan to lock in profits.

If EUR/USD rises further in the second half of the session, and bears show no activity at 1.0868, bulls may extend the rally significantly. In this scenario, I will delay short positions until the next resistance at 1.0901. I will sell only after an unsuccessful consolidation at this level. If no bearish reaction occurs, I will consider short positions from 1.0935, expecting a 30–35 pip downward correction.

Commitments of Traders (COT) Report:

The COT report for February 25 showed an increase in long positions and a significant decrease in short positions. More traders are willing to buy euros, supporting demand for risk assets.

U.S. pressure on Ukraine to secure a ceasefire deal has also fueled interest in higher-risk assets. In addition, Eurozone inflation data meeting ECB expectations has enabled the central bank to continue rate cuts, which should stimulate the economy and support long-term euro appreciation.

However, the balance still favors sellers, meaning buying at peak levels requires caution. Non-commercial long positions increased by 12,379, reaching 182,699. Non-commercial short positions decreased by 13,616, falling to 208,124. The net gap between long and short positions widened by 4,106.

Indicator Signals:

Moving Averages

The pair is trading near the 30 and 50-period moving averages, indicating market uncertainty.

Bollinger Bands

In case of a decline, the lower Bollinger Band around 1.0807 will act as support.

Key Indicator Descriptions:

• Moving Averages (MA): Identify the current trend by smoothing out price volatility.
  • 50-period MA: Marked in yellow.
  • 30-period MA: Marked in green.
• MACD (Moving Average Convergence/Divergence): Identifies momentum shifts.
  • Fast EMA – 12-period
  • Slow EMA – 26-period
  • Signal line SMA – 9-period
• Bollinger Bands: Measure volatility and overbought/oversold conditions.
  • 20-period setting used.
• Non-commercial traders: Include hedge funds, institutional investors, and speculative traders who do not hedge but seek profit from price movements.
• Long non-commercial positions: Represent the total long positions held by speculative traders.
• Short non-commercial positions: Represent the total short positions held by speculative traders.
• Net non-commercial position: The difference between long and short positions.