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The EUR/USD pair continued trading within the 1.1769–1.1829 range throughout Friday. However, on Monday morning the price consolidated above the 50.0% retracement level at 1.1829, which allows expectations for continued growth toward the 1.1888 and 1.1963 levels. The "bearish" offensive has been halted.
The wave picture on the hourly chart remains straightforward. The most recent upward wave broke above the previous wave's high, while the latest downward wave failed to break the previous low. Thus, the trend remains bullish. Bulls took a short pause within a large-scale offensive that might not have happened without Donald Trump. Trump has escalated tensions globally and within the United States to the extreme, and markets continue to react by fleeing from the risky U.S. currency with uncertain economic prospects.
On Friday, the news background was rather weak both in the U.S. and the Eurozone. Traders continued to digest information received on Thursday from the ECB and the Bank of England, though this mainly concerned the Bank of England. As a result, the pound traded more actively on both Thursday and Friday. The European currency spent four days in a horizontal channel, and data on U.S. consumer sentiment and German industrial production were not enough to push the pair out of this range. It is worth noting that German industrial production fell by 1.9% in December, far worse than market expectations, while the trade balance increased to €17.1 billion versus the forecast €14.1 billion. Thus, the moderate intraday rise of the euro was quite justified. U.S. consumer sentiment data could have supported the bears, but they appear to have exhausted their corrective potential. In my view, bulls will resume their attack in the near future, as the overall news background remains very favorable for them. This week, important U.S. data on inflation, the labor market, and unemployment will be released, which could weaken the bears even further.
On the 4-hour chart, the pair rebounded from the 61.8% retracement level at 1.1770, reversed in favor of the European currency, and consolidated above the 50.0% Fibonacci level at 1.1829. Thus, in the near term, the growth process may continue up to the 0.0% retracement level at 1.2083. No emerging divergences are observed today on any indicators.
Commitments of Traders (COT) Report:
During the latest reporting week, professional market participants opened 11,965 long positions and closed 19,262 short contracts. 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 302,000, while short positions amount to 138,000. This represents more than a twofold advantage for the bulls.
For thirty-three consecutive weeks, large players were reducing 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 policies remain the most significant factor for traders, as they create numerous problems that will have long-term and structural consequences for the U.S. For example, deterioration in the labor market and a decline in global reputation. Traders are also concerned about the potential loss of Federal Reserve independence in 2026 and Donald Trump's geopolitical ambitions.
News Calendar for the U.S. and the Eurozone:
Eurozone – Speech by ECB President Christine Lagarde (04:00 UTC).
On February 9, the economic calendar contains only one entry, which does not attract much interest after the ECB meeting. The impact of the news background on market sentiment on Monday is expected to be minimal.
EUR/USD Forecast and Trading Advice:
I would not consider selling the pair today, as the bulls appear to have launched a new offensive. Buy positions were possible after a close above the 1.1829 level on the hourly chart, with targets at 1.1888 and 1.1963.
Fibonacci grids are drawn from 1.1805–1.1578 on the hourly chart and from 1.1577–1.2083 on the 4-hour chart.
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