Hello, dear traders!

Yesterday, we analyzed the pair in higher time frames. Today, we are going to analyze EUR/USD in terms of lower time frames, primarily the daily chart. Before that, let's take a look at the external background. The COVID-19 pandemic, as well as a mass vaccination program, is still making headlines. The global infection rate has been slowing down for six weeks. However, the trend has reversed and the number of new virus cases is now rising again. A fast pace of the vaccine rollout has not yielded desired results yet. The vaccination in Europe lags behind schedule. Instead of dealing with such a burning issue, the EU authorities are working on "Digital Green Pass". It would prove that a person has been vaccinated. Such documents may become important in the near future. Today, however, there are more serious problems than that.

Germany's positive CPI and manufacturing PMI did not provide support for the euro. As a result, EUR/USD tumbled yesterday. Germany's labor market statistics and the eurozone's PMI are set for release today. As for the United States, its macroeconomic calendar is empty. Nevertheless, Fed's Brainard and Daly will deliver their speeches later today.

Daily chart

On the daily chart, we can see that the price dropped sharply on Friday. It happened after the pair's failed attempt to break through the Ichimoku cloud, as well as the formation of a bullish candlestick with a very long upper shadow after a false breakout at 1.2200. On March 1, EUR/USD reached the level of 1.2100, reversed down, and closed at the lower border of the Ichimoku cloud. Thus, yesterday's trading recommendation for selling the pair during its attempts to break above 1.2100 turned out to be accurate. Currently, the pair is moving in a downward trend. On top of that, there is strong pressure on EUR/USD. The quote has left the Ichimoku cloud and has sank below EMA(89). It is testing an important psychological level of 1.2000 at the moment. Bear should keep the price below the lower border of the Ichimoku cloud and EMA(89), and to close below 1.2000. The next downward target is seen at 1.1952, the low of February 5, 2021.

Trading recommendations on EUR/USD

According to the weekly and daily charts, the pair is unlikely to extend its upward trend, which is about to reverse. Consolidation of the price below 1.2000 and a breakout at 1.1952 will confirm a change in the trend. Sell deals are more preferable under the circumstances. At the same time, given such a sharp drop in the price, one should not rush to sell the instrument. The price may well rebound upward. Therefore, the best time to sell EUR/USD is after a short-term spike to 1.2027, 1.2053, and 1.2065.

Have a nice trading day!