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On Monday, the EUR/USD pair reversed in favor of the European currency and consolidated above the resistance level at 1.1645–1.1648 as well as above the descending trend channel. Thus, the growth process can be continued (and is continuing) toward the next Fibonacci level of 38.2% at 1.1686. A rebound from this level would work in favor of the U.S. currency and lead to some decline, while a close above it would increase the likelihood of further growth toward the next correction level of 23.6% at 1.1731.
The wave structure on the hourly chart remains simple. The last completed downward wave did not break the low of the previous wave, and the new upward wave has not yet broken the previous low. Thus, the trend remains "bearish." In my view, the decline of the pair will not be long or strong, but a break of the already "bearish" trend is now required in order to expect a bullish advance. Based on the current chart picture, such a break would occur above the 1.1700 level.
On Monday, bearish traders were most likely planning to continue their attacks, which have been ongoing for several weeks, but their plans were disrupted by Donald Trump. Over the weekend, the U.S. president stated that starting February 1, tariffs on seven European countries and the United Kingdom would be raised by 10% due to their refusal to accept the U.S. proposal to purchase the island of Greenland. The tariffs have been introduced and may be increased further if the position of European countries does not change, while the EU itself is now developing a plan of retaliatory measures. These include tariffs, freezing investments in the U.S., and restricting U.S. companies' access to the European market. In addition, the trade deal between the U.S. and the EU reached last year may be canceled. Let me remind you that Brussels and Washington agreed on all the terms of trade cooperation, but Trump apparently believes that a trade deal and new trade pressure can coexist. In my opinion, if new import tariffs are introduced, there can be no talk of any trade truce. The year 2026 is starting the same way as 2025 did.
On the 4-hour chart, the pair has returned to the support level at 1.1649–1.1680, which allows traders to expect a rebound from this area and a continuation of the decline toward the Fibonacci level of 38.2% at 1.1538. A close above the 1.1649–1.1680 level would work in favor of the EU currency and a resumption of growth toward the correction level of 0.0% at 1.1829. No emerging divergences are observed on any indicator today.
Commitments of Traders (COT) Report:
During the latest reporting week, professional players closed 14,661 long positions and opened 15,495 short positions. Sentiment in 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 283,000, while short positions amount to 151,000—almost a twofold advantage for the bulls.
For thirty-three consecutive weeks, large players were reducing short positions and increasing long positions. Then the "shutdown" began, and now we are seeing the same picture again: professional traders continue to build long positions. Donald Trump's policies remain the most significant factor for traders, as they create numerous problems that will have long-term and structural consequences for the United States—for example, a deterioration in the labor market. Traders fear a loss of Federal Reserve independence in 2026 under pressure from Trump and amid the resignation of Jerome Powell.
News Calendar for the U.S. and the Eurozone:
On January 20, the economic calendar contains two events that are of little interest. The impact of the news background on market sentiment on Tuesday may be extremely weak.
EUR/USD Forecast and Trading Advice:
Selling the pair is possible today in the event of a rebound from the 1.1686 level on the hourly chart, with targets at 1.1648 and 1.1612. Buy positions were possible after a consolidation above the descending channel and the resistance level at 1.1645–1.1648 on the hourly chart, with targets at 1.1686 and 1.1731. Today, these positions can be kept open.
Fibonacci grids are drawn from 1.1492–1.1805 on the hourly chart and from 1.1066–1.1829 on the 4-hour chart.
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