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The EUR/USD pair continued its decline on Monday and by the end of the day found itself in the zone between the 61.8% and 50.0% corrective levels according to the new Fibonacci grid. There are quite a few chart levels in this zone, so identifying the formation of a trading signal is not an easy task. I believe that today consolidation above the 1.1829 level will work in favor of the European currency and a resumption of growth toward the 1.1888 and 1.1963 levels. The trend remains bullish.
The wave situation on the hourly chart remains simple. The last completed downward wave did not break the low of the previous wave, while the most recent upward wave broke the previous peak. Thus, the trend remains bullish. The bulls have taken a short pause within the framework of a large-scale offensive that might not have happened without Donald Trump. Trump has heated up the situation in the world and in the United States to the limit, and the markets continue to react by fleeing from the risky U.S. currency with uncertain economic prospects.
There were few important events on Monday. The market is waiting for news on the "shutdown" and Iran, but did not receive any yesterday. As a result, attention shifted to economic reports. The most important among them was the U.S. ISM Manufacturing PMI, and this index did not just surprise—it stunned. Business activity in manufacturing jumped to 52.6, setting a record for the past three years. It is hard to understand what caused such a sharp rise, but under Donald Trump many economic indicators show values that are difficult to interpret. On the one hand, there is an official report. On the other hand, personally, I have doubts about the 52.6 level after the index had remained below the 50.0 level for three years. One way or another, the bears were delighted by a new opportunity to open trades and did not hesitate to take advantage of it. The dollar showed gains by the end of the day, but this growth only evokes skepticism for me. America is once again mired in scandals and protests, which under Trump has become an absolutely normal phenomenon. The American people are rebelling against the president, against the Immigration Service, and against many famous figures.
On the 4-hour chart, the pair consolidated below the 100.0% corrective level at 1.1918 and declined to the 76.4% level at 1.1813. A rebound from the 1.1813 level would allow traders to expect a reversal in favor of the euro and a return to the 1.1918 level. Consolidation below 1.1813 would allow expectations of a continuation of the decline toward the 1.1748 and 1.1694 levels. No emerging divergences are observed on any indicator today.
Commitments of Traders (COT) Report:
During the latest reporting week, professional market participants opened 15,101 long positions and closed 5,338 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 290,000, while short positions amount to 158,000. This represents an almost twofold advantage for the bulls.
For thirty-three consecutive weeks, large players were getting rid of short positions and increasing long ones. Then the "shutdown" began, and now we are seeing the same picture again: professional traders continue to build up long positions. Donald Trump's policy remains the most significant factor for traders, as it creates many problems that will have long-term and structural consequences for the United States—for example, deterioration in the labor market and a decline in global reputation. Traders also fear a loss of the Federal Reserve's independence in 2026 and Donald Trump's geopolitical ambitions.
News Calendar for the U.S. and the European Union:
United States – JOLTS Job Openings Change (15:00 UTC).
On February 3, the economic calendar contains one event of medium importance. The influence of the news background on market sentiment on Tuesday may be weak.
EUR/USD Forecast and Trading Advice:
Selling the pair was possible after a close below the 1.1945 level on the hourly chart, with targets at 1.1867 and 1.1805. Both targets were reached. I doubt further decline of the pair. Buy positions will become possible after a close above the 1.1829 level on the hourly chart, with targets at 1.1888 and 1.1963.
Fibonacci grids are built from 1.1805–1.1578 on the hourly chart and from 1.1918–1.1471 on the 4-hour chart.
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