26.06.202511:17 Forex Analysis & Reviews: EUR/USD – June 26th. Powell's Rhetoric Remains Unchanged

On Wednesday, the EUR/USD pair continued to rise and reached the 127.2% Fibonacci corrective level at 1.1712 on Thursday morning. A rebound from this level could lead to a reversal in favor of the U.S. dollar and a decline toward 1.1645 and 1.1574. If the pair consolidates above 1.1712, it would increase the likelihood of further euro gains toward the next target at 1.1802.

The wave pattern on the hourly chart remains simple and clear. The last completed downward wave broke slightly below the low of the previous wave, while the new upward wave easily surpassed the previous high. Thus, the trend has turned bullish again. The lack of progress in U.S.–China and U.S.–EU trade negotiations, the Fed meeting's failure to support the dollar, and the Middle East conflict not benefiting the greenback—all of this forced the bears to hold back. As expected, the bearish trend was neither strong nor long-lasting.

There was virtually no significant news on Wednesday. The only event was Jerome Powell's testimony before the U.S. Senate Banking Committee, during which he essentially repeated the same points he had made on Tuesday before the House Financial Services Committee and earlier following the Fed's policy meeting. Powell's position remains unchanged: the FOMC is in a favorable position to maintain a wait-and-see approach. He stated that it's impossible to forecast the impact of tariffs on inflation without knowing their duration and magnitude. According to Powell, U.S. inflation will likely accelerate, but the extent remains uncertain. Therefore, the best strategy is to wait until the full effect of the tariffs becomes clear, after which policy decisions can be made. Bulls resumed their offensive on Tuesday when the Iran-Israel conflict ended unexpectedly and rather quickly.

On the 4-hour chart, the pair climbed to the 1.1680 level. A rebound from this level would favor the dollar and a move toward the 127.2% Fibonacci level at 1.1495. However, within the upward trend channel, the bullish trend remains intact, and the dollar lacks momentum for a strong rebound. If the pair consolidates above 1.1680, further growth toward the 161.8% Fibonacci level at 1.1851 could follow. No looming divergences are visible in any indicators today.

Commitments of Traders (COT) Report:

Over the last reporting week, professional traders opened 12,057 Long positions and 3,529 Short positions. The sentiment among the "Non-commercial" group remains bullish due to Donald Trump and continues to strengthen. The total number of Long positions held by speculators is now 221,000, while Short positions stand at 119,000, with the gap widening almost continuously. This indicates sustained demand for the euro and a lack of interest in the dollar. The situation remains unchanged.

For twenty consecutive weeks, large traders have been reducing Short positions and increasing Longs. Although the divergence in monetary policy between the ECB and the Fed is already significant, Donald Trump's policies are viewed as a more important factor by traders, as they may lead to a U.S. recession and other long-term structural problems for the American economy.

Economic Calendar for the U.S. and Eurozone:

• U.S. – Durable Goods Orders (12:30 UTC)
• U.S. – Final Q1 GDP Report (12:30 UTC)

The June 26 economic calendar includes two relatively important events. Therefore, the news background may influence market sentiment during the second half of the day.

EUR/USD Forecast and Trading Tips:

Selling the pair is possible today on a rebound from 1.1712 on the hourly chart, targeting 1.1645 and 1.1574. Earlier, I recommended buying on a rebound from 1.1454 with a target of 1.1574. That target was achieved, and its breakout allowed for further gains toward 1.1645 and 1.1712. All targets have now been reached.

The Fibonacci grids are constructed based on the 1.1574–1.1066 range on the hourly chart and the 1.1214–1.0179 range on the 4-hour chart.