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On Monday, the EUR/USD pair continued a very mild decline toward the 38.2% corrective level at 1.1718 after four rebounds from the resistance zone of 1.1795–1.1802. A firm consolidation above the 1.1795–1.1802 level would work in favor of the European currency and a continuation of growth toward the 0.0% corrective level at 1.1919.
The wave picture on the hourly chart remains simple. The last completed upward wave broke above the peak of the previous wave, while the most recent downward wave failed to break the previous low. Thus, the trend officially remains "bullish." It would be hard to call it strong, but in recent weeks the bulls regained some confidence, after which the holidays began. The Fed's monetary policy easing will put pressure on the dollar in 2026, while the ECB will not create any problems for the euro.
On Monday, there was no news background in either the United States or the European Union, and both last week and the current week are more holiday-oriented than working weeks. Ahead of the New Year, bullish traders stopped attacking and gave the bears a chance to show themselves. Of course, neither bulls nor bears want to attack during the New Year period, which is why we are not seeing any significant strengthening of the US dollar. This state of affairs in the market is likely to persist until next year. As early as next week, economic data will start to come in, the market will move past the holidays, and trading activity will resume. In my view, we may see a new bullish advance as early as the beginning of next year.
On the 4-hour chart, the pair reversed in favor of the European currency and resumed its growth toward the 0.0% corrective level at 1.1829. A rebound from this level would work in favor of the US dollar and lead to a modest decline toward the support level of 1.1649–1.1680. A firm break and consolidation above the 1.1829 level would increase the likelihood of further euro gains. No emerging divergences are observed today on any indicator.
Commitments of Traders (COT) Report:
During the latest reporting week, professional players opened 8,884 long positions and 2,769 short positions. The sentiment of the "Non-commercial" group remains "bullish" thanks to Donald Trump and his policies and continues to strengthen over time. The total number of long positions held by speculators now stands at 277,000, while short positions amount to 132,000. This represents more than a twofold advantage for the bulls.
For thirty-three consecutive weeks, large players were reducing short positions and increasing longs. Then the "shutdown" began, and now we are seeing the same picture again: bulls continue to build long positions. Donald Trump's policies remain the most significant factor for traders, as they create numerous problems that will have a long-term and structural nature for the United States—for example, the deterioration of the labor market. Traders fear a loss of the Fed's independence in 2026 under pressure from Trump and amid Jerome Powell's planned resignation in May.
News Calendar for the US and the Eurozone:
On December 30, the economic calendar contains no scheduled events. The impact of the news background on market sentiment on Tuesday will be absent.
EUR/USD Forecast and Trader Advice:
Selling the pair was possible after a rebound from the 1.1795–1.1802 level on the hourly chart with a target of 1.1718. These trades can be kept open today, but I do not expect a strong decline. Buy trades can be opened after a close above the 1.1795–1.1802 level with a target at 1.1919.
The Fibonacci grids are drawn from 1.1392 to 1.1919 on the hourly chart and from 1.1066 to 1.1829 on the 4-hour chart.
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