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The wave structure on the hourly chart remains clear. The last completed downward wave failed to break the previous low, while the last upward wave broke the previous high. Thus, the trend remains "bullish" for now. Recent news about increased tariffs on steel and aluminum caused bears to retreat again, while the lack of real progress in U.S.–China negotiations makes traders hesitant to act. The trend will be considered shifting to "bearish" only if the pair consolidates below the 1.1374–1.1380 level.
On Tuesday, there was no economic data from either the Eurozone or the U.S., strictly speaking. However, in terms of broader news flow, there has been plenty of information recently, though none of it offered support to the bears. Probably the most notable event was the two-day negotiations between China and the U.S. in London. This was the second round of talks, during which the sides agreed to a "framework agreement," yet no one bothered to clarify what it actually entails. Both sides acknowledged progress toward a truce, but no concrete details of the negotiations were disclosed. As a result, traders are left guessing what was discussed or agreed upon. The market is unlikely to respond to an agreement whose content remains completely unknown. Delegations from Beijing and Washington noted that only they had reached a mutual understanding, and now the agreement must be approved by Donald Trump and Xi Jinping. So, for now, the U.S. and China have agreed on nothing. These negotiations could drag on for quite some time.
On the 4-hour chart, the pair rose to the 127.2% Fibonacci retracement level at 1.1495 and bounced down from it, which opens the potential for a decline toward the 100.0% level at 1.1213. A consolidation above 1.1495 would increase the likelihood of continued growth toward the next Fibonacci level at 161.8% — 1.1851. The CCI indicator shows a "bullish" divergence, so a return to 1.1495 is possible in the near term. The trend channel still indicates the presence of a "bullish" trend.
Commitments of Traders (COT) Report:
Over the past reporting week, professional traders closed 1,540 long positions and 4,830 short positions. The sentiment of the "Non-commercial" group remains "bullish," largely due to Donald Trump. The total number of long positions held by speculators now stands at 203,000, while short positions amount to 120,000 — and the gap, with few exceptions, continues to widen. In other words, the euro is in demand, while the dollar is not. The situation remains unchanged.
For eighteen consecutive weeks, large players have been reducing short positions and increasing long ones. The divergence in monetary policy between the ECB and the Fed is already substantial, but Donald Trump's policy actions are a more influential factor for traders, as they could trigger a U.S. recession and various long-term structural problems.
Economic Calendar for the U.S. and Eurozone:
On June 11, the economic calendar contains one fairly important entry. Therefore, the news background may influence market sentiment on Wednesday, particularly in the second half of the day.
EUR/USD Forecast and Trader Recommendations:
Selling the pair was possible upon a rebound from the 1.1454 level, with targets at 1.1374–1.1380 and 1.1320. The first target has been met. A close below the 1.1374–1.1380 zone would allow for renewed selling. I previously recommended buying from the 1.1374–1.1380 level, with a target at 1.1454. A close above 1.1454 would justify holding long positions.
The Fibonacci levels were built based on the 1.1574–1.1066 range on the hourly chart and 1.1214–1.0179 on the 4-hour chart.
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