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The EUR/USD pair rebounded from bullish imbalance 12 and reversed in favor of the European currency, just as I had warned. Thus, traders received another bullish signal that allowed them to enter long positions. On Wednesday, the situation became somewhat risky for the bulls for several hours as they reacted to the 130,000 jobs created in the U.S. in January. However, it was later revealed that the U.S. Bureau of Statistics revised the total number of jobs created in 2025 downward by 1 million. According to the updated data, slightly more than 200,000 jobs were created over the entire year, which translates into an average monthly increase of about 19,000. As we can see, the bears did not have long to celebrate.
Today, the bulls had an excellent opportunity to launch a new offensive, as U.S. inflation slowed to 2.4% year-over-year, significantly increasing the likelihood of further Federal Reserve monetary easing. However, surprisingly, this report was ignored. For that matter, the market reaction to payrolls and unemployment data on Wednesday was also relatively muted.
The chart structure continues to signal bullish dominance. The bullish trend remains intact. A bullish signal was formed in imbalance 11, followed shortly by another in imbalance 12. Therefore, traders can continue holding long positions. If you look closely, you can also spot another small bullish imbalance from February 9. Since it is relatively minor, I did not mark it separately on the charts, but it exists and may also provide support to the bulls, potentially generating a reaction as early as today.
On Friday, the news background handed all the cards to the bulls. Why they did not take advantage of the opportunity to attack remains an open question. Of course, the actual inflation figure matched market expectations, which partly explains the lack of reaction. Nevertheless, the slowdown in inflation opens up new dovish prospects for the FOMC. In my view, this fact alone justifies further dollar weakness.
Bulls have had sufficient reasons for a renewed advance for the past six to seven months, and those reasons continue to grow with each passing week. These include the dovish outlook for FOMC monetary policy, Donald Trump's ongoing policies (which have not changed), U.S.–China tensions (currently only under a temporary truce), public protests in the U.S. under the "No Kings" movement, labor market weakness, the autumn government shutdown (which lasted a month and a half), and another shutdown at the beginning of February. Additional factors include U.S. military actions toward certain countries, criminal proceedings against Powell, the "Greenland confusion," and worsening relations with Canada and South Korea. Thus, in my opinion, further growth of the pair would be entirely logical.
I still do not believe in a bearish trend. The news background remains extremely difficult to interpret in favor of the dollar, so I do not attempt to do so. The blue line indicates the price level below which the bullish trend could be considered over. Bears would need to push the pair down approximately 460 points to reach it, and I consider this task unrealistic under the current news background and chart structure, where not a single bearish pattern is present.
As the nearest upward target, I previously considered the bearish imbalance at 1.1976–1.2092 on the weekly chart, formed back in June 2021. This pattern has now been fully filled. Above that, two levels can be highlighted: 1.2348 and 1.2564 — both corresponding to peaks on the monthly chart.
Economic Calendar for the U.S. and the European Union:
European Union – Change in Industrial Production (10:00 UTC).
On February 16, the economic calendar contains only one entry, and it is not particularly significant. The impact of the news background on market sentiment on Monday may be very limited.
EUR/USD Forecast and Trading Advice:
In my view, the pair remains in the stage of forming a bullish trend. Although the news background continues to favor the bulls, the bears have periodically launched attacks in recent months. Nevertheless, I see no realistic reasons for the start of a bearish trend.
From imbalances 1, 2, 4, 5, 3, 8, and 9, traders had opportunities to buy the euro. In each case, we observed certain growth, and the bullish trend has remained intact. Last week, a new bullish signal was formed from imbalance 11, once again allowing traders to open long positions with a target of 1.1976 — which was achieved. This week, another bullish signal was formed in imbalance 12, giving traders a new opportunity to buy the pair. The formal upward targets are 1.2348 and 1.2564.
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