Bullish Trend Set to Reclaim Dominance Following Technical Corrective Phase

Manuel

Central Bank

Economic

Summary:

The current reversal aligns with the high-probability confluence of the 0.50 and 0.618 Fibonacci retracement levels.

BUY EURUSD

EXP

PENDING

1.18300

Entry Price

1.19870

1.17500

1.18429 -0.00100 -0.08%

Pips

PENDING

1.17500

Exit Price

1.18300

Entry Price

1.19870

Institutional sentiment regarding the German economy took an unexpected turn in February, as the ZEW survey fell to 58.3, significantly missing the market's optimistic projection of 65.0. While perceptions of the current economic climate showed a marginal improvement—rising to -65.9 from -72.7 in January—the figure remained adrift of the consensus target. This regional pessimism extended to the broader Eurozone, where the Economic Sentiment Index retreated to 39.4, defying expectations for a recovery toward 45.2.

Concurrently, the final reading of Germany’s Harmonized Index of Consumer Prices (HICP) confirmed a monthly contraction of 0.1% in January. On an annualized basis, headline inflation accelerated slightly to 2.1%, up from the 2.0% observed in December. These figures fuel persistent speculation regarding a potential monetary pivot by the European Central Bank (ECB), exerting downward pressure on the Euro as traders weigh the likelihood of imminent easing.

Across the Atlantic, Federal Reserve rhetoric remains characteristically diverse. San Francisco Fed President Mary Daly maintained a hawkish stance, emphasizing that inflation remains uncomfortably above target. Conversely, Fed Governor Michael Barr noted that while neutral rates have likely shifted slightly higher, the central bank retains the luxury of time in its policy deliberations. Meanwhile, Chicago Fed President Austan Goolsbee acknowledged inflationary progress but warned that persistent price levels would imply a policy stance that is looser than intended, framing a 3% rate as a "neutral-loose" estimate.

The NY Empire State Manufacturing Index provided a bright spot, climbing to 7.1 in February and outperforming expectations of 6.0. Labor market indicators also showed resilience, with the four-week average of the ADP Employment Change rising to 10.3K. Recent data from the U.S. Department of Labor further illustrated this stabilization; despite Initial Jobless Claims rising to 227,000—exceeding the 222,000 consensus—the four-week moving average remains anchored near 219,500. This stabilization follows the robust January Nonfarm Payrolls (NFP) report, which saw the creation of 130,000 new positions, effectively doubling consensus forecasts. Bullish Trend Set to Reclaim Dominance Following Technical Corrective Phase_1

Bullish Trend Set to Reclaim Dominance Following Technical Corrective Phase_1

Technical Analysis

EURUSD has staged a compelling bullish rebound following a corrective move that bottomed near the 1.1803 handle. At the time of writing, the pair has reclaimed the 1.1850 level, successfully defending the critical 1.1827 support zone.

This area is of paramount importance as it represents the closure of the January 25th gap. This price action suggests that the primary bullish impulse is being reinvigorated after a standard technical retracement. The current reversal aligns with the high-probability confluence of the 0.50 and 0.618 Fibonacci retracement levels, where corrective moves often exhaust themselves before the primary trend resumes. Adding technical weight to this floor, the 4-hour (H4) Moving Averages are situated at 1.1870 and 1.1777, effectively sandwiching the current price and providing a robust structural zone of interest.

Momentum indicators further support the bullish thesis. The Relative Strength Index (RSI) descended toward the 31 level, mirroring oversold conditions seen in early February when the pair previously pivoted higher. Notably, a bullish divergence is emerging as the RSI exhibits more aggressive selling pressure than the actual price action relative to previous lows, suggesting the bears are losing their grip.

Simultaneously, the MACD histogram is printing progressively smaller bearish bars, indicating a clear dissipation of downward momentum. As a bullish crossover appears imminent, and with signal lines poised to reclaim neutral territory, buy-side positions are increasingly favored within this technical cluster.

Trading Recommendations

Trading direction: Buy

Entry price: 1.1830

Target price: 1.1750

Stop loss: 1.1987

Validity: Feb 27, 2026 15:00:00

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Bullish Trend Set to Reclaim Dominance Following Technical Corrective Phase

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