This morning, 21 February, before the start of the European trading session, the euro against the dollar pair is trading in the red area - the EURUSD stands at 1.2324, so the euro is reduced by 64 pips, compared with yesterday. Due to the decline of the euro in recent days there and the growth of the dollar index DXY from 89.23 to 89.79.
In my opinion, since the end of last week, the pair EURUSD rate is reduced, because the euro has no reason for the strong growth from current levels.
Today news background is rather saturated. IHS Markit will publish its Economic Review of February in the euro zone 12:00 (GMT + 3) and for the United States in 17:45 (GMT + 3). ONS will publish at 12:30 (GMT + 3) Statistics on the labor market in the UK in January - wage growth, unemployment, etc. Also, the Bank of England in the evening of 17:15 (GMT + 3) will begin hearing in the February Inflation Report. At 22:00 (GMT + 3), the US Federal Reserve (Fed) to publish the minutes of the January meeting of the monetary policy, which was held on January 30-31. Against the backdrop of all these important events today I expect a more dynamic trading session.
EURUSD EURUSD Forecast:
On the four-hour timeframe (H4) EURUSD tries to break the uptrend line:
In case of breakdown of the trend line signals indicating a potential weakening of the euro will increase. Thus, on the hourly timeframe (H1) the likelihood of the continuation of decrease in pair EURUSD to consolidate the level of January (1,2190-1,2290) will increase (C1 scenario on the chart below):
Still, if the statistics, which are published today (at the beginning of the review I did mentioned), as well as protocols Fed disappointed dollar bulls, the EURUSD pair might rebound at least to the level of depression (scenario C2 in the graph), which was formed at the end of January, range (1,2350-1,2390).
Vesselin Petkov Alpari