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24.07.2025 11:21 AMOn Wednesday, the EUR/USD pair rebounded from the 127.2% Fibonacci retracement level at 1.1712, reversed in favor of the euro, and continued to rise toward the 1.1802 level. A rebound from 1.1802 would favor the U.S. dollar and a slight decline toward 1.1712, while a firm break above 1.1802 would increase the likelihood of further growth toward the next Fibonacci level at 161.8% – 1.1888.
The wave pattern on the hourly chart remains simple and clear. The last completed downward wave did not break the low of the previous wave, while the latest upward wave broke the previous high. Thus, the trend currently remains bullish despite a prolonged correction. The lack of real progress in U.S. trade negotiations, the low probability of trade deals with most countries, and the introduction of new tariffs continue to leave a bleak outlook for bears.
On Wednesday, the news background was virtually absent, but in recent days several reports indicated that trade talks between the EU and the U.S. are stalling. However, negative news for the euro is outweighed by the even more negative news for the dollar. Let me remind you that traders react very negatively to any reports of pressure from Donald Trump on the Federal Reserve or directly on Jerome Powell, as well as to news about new tariffs that the U.S. president intends to impose. Therefore, a potential collapse of EU-U.S. trade talks does not scare the bulls—it only worries the bears.
Today, the European Central Bank (ECB) meeting will take place, from which I personally do not expect anything at all. For the first time in a year, monetary policy parameters will remain unchanged. But since the ECB has effectively reached its inflation target, there's no need for higher rates. Further easing of monetary policy is possible if inflation slows, which is unlikely due to the trade war with the U.S.
On the 4-hour chart, the pair reversed in favor of the euro and consolidated above the 1.1680 level. Previously, the euro had closed below the ascending trend channel. I still refrain from declaring the start of a bearish trend. In my opinion, the hourly chart is more informative at this point. The pair exited the channel not due to bearish strength but because of the length of the correction. The upward movement may continue toward the 161.8% Fibonacci level at 1.1854.
Commitments of Traders (COT) Report:
During the last reporting week, professional traders opened 971 long positions and closed 6,654 short positions. The sentiment of the "Non-commercial" group remains bullish thanks to Donald Trump and continues to strengthen over time. The total number of long positions held by speculators now stands at 242,000, while short positions amount to 113,000—more than a twofold difference. Also note the number of green cells in the table above, which indicate a strong increase in euro positions. In most cases, interest in the euro is rising, which means interest in the dollar is falling.
For 23 consecutive weeks, large players have been reducing short positions and increasing long ones. Despite the significant difference in monetary policy between the ECB and the Fed, Donald Trump's policies remain the more decisive factor for traders, as they could trigger a recession in the U.S. and bring numerous other structural and long-term problems for the American economy.
Economic Calendar for the U.S. and Eurozone (July 24):
The July 24 economic calendar is filled with entries, with the ECB meeting standing out. The news background may influence market sentiment throughout Thursday.
EUR/USD Forecast and Trading Advice:
I do not recommend selling the pair today, as the bulls have resumed their advance. Buy positions could have been opened on a rebound from 1.1574, on a close above 1.1645, or on a close above 1.1712 targeting 1.1802. Today, open positions can be held with targets at 1.1802 and 1.1888.
Fibonacci levels are plotted from 1.1574 to 1.1066 on the hourly chart and from 1.1214 to 1.0179 on the 4-hour chart.
