The sudden improvement in sentiment around the US dollar (USDX) has forced the EUR / USD pair to retreat from Tuesday's weekly highs around 1.2168, it failed to stay above the 200 EMA as investors they favored the dollar amid rally in US 10-year Treasury yields to levels last seen a year ago well above 1.30%.
Meanwhile, reflation trading and vaccine optimism in the United States, along with the strong global economic rebound expected in the second half of the year, remain the sole driver of the EUR / USD price action, as well as the rest of the risk appetite sentiment.
At the technical level, we note the formation of a bearish pattern, the medium-term objective is a fall to the 1.1962 area, while if it remains below the 3/8 of Murray there could be strong downward pressure.
At this time the eagle indicator is showing an overbought signal and it is very likely that the EUR / USD pair will have a strong bearish movement for the next few days.
On the contrary, a pullback towards the 1.2110 area, there is the SMA of 21, it will be a good point to sell the EUR / USD pair, because in that area there is strong downward pressure, as you can see in the graph of 4 hours, at 1.2150 the EMA of 200 is located and this adds downward pressure for the pair.
Our recommendation is to only sell if there is a pullback, always sell, do not buy, as the market sentiment points to a fall in the euro.
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Support And Resistance Levels For February 17 - 18, 2021
Resistance (1) 1.2121
Resistance (2) 1.2149
Resistance (3) 1.2179
Support (1) 1.2040
Support (2) 1.2000
Support (3) 1.1965
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Trading tip for EUR/USD for February 17 - 18, 2021
Sell below 1.2085 (3/8) with take profit at 1.2040 and 1.2001, stop loss above 1.2120.
Sell if pullback at 1.2110 (SMA 21) with take profit at 1.2060 and 1.2001, stop loss above 1.2150.
