On Monday, the EUR/USD pair moved sideways above the 100.0% Fibonacci retracement level at 1.1558. Therefore, upward movement may resume at any moment toward the 1.1612 and 1.1645 levels. A consolidation below 1.1558 would favor the U.S. dollar and signal a potential decline toward the 127.2% Fibonacci level at 1.1495.

The wave pattern on the hourly chart remains clear and straightforward. The last completed upward wave broke the previous high, while the most recent downward wave broke the previous low. This means the current trend can be considered bearish, although it has frequently shifted recently due to the news background. Donald Trump succeeded in signing several favorable deals, which supported the bears, along with Jerome Powell's remarks after the latest Fed meeting. However, the latest labor market data and the revised outlook for Fed monetary policy are now supporting the bulls.

There was no major news on Monday, so traders took a short pause, at least until today's U.S. ISM Services PMI report. Following the latest U.S. labor and unemployment data, market expectations for the American economy have worsened sharply. Additionally, tensions continue to rise due to Donald Trump, who already dismissed the head of the U.S. Bureau of Labor Statistics over inaccurate payroll data for May and June. The trade war also continues, with Trump regularly announcing new tariffs. In the near future, the global economy may be shaken by a new tariff package, as Trump has demanded that Russia end the war in Ukraine by August 8. If this does not happen, tariffs of 100% or more will be imposed on all countries purchasing energy resources from Russia. Trump is considering this step to force other nations to stop buying Russian oil and gas, thereby pressuring Russia to end the military conflict in Ukraine.

On the 4-hour chart, the pair reversed in favor of the euro and consolidated above the 127.2% Fibonacci level at 1.1495. This opens the door for continued growth toward the 1.1680 level. Traders should not be concerned about the close below the ascending trend channel, as this does not guarantee the formation of a prolonged bearish trend. Moreover, the recent news background points more toward renewed weakness in the U.S. dollar.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 461 long positions and 2,617 short positions. The sentiment of the "Non-commercial" group remains bullish thanks to Donald Trump and is gradually strengthening. The total number of long positions held by speculators now stands at 248,000, while short positions total 125,000 — a gap of more than 2 to 1. Additionally, note the number of green cells in the table above, indicating strong position buildup in the euro. In most cases, interest in the euro is increasing, which implies declining interest in the dollar.

For 25 consecutive weeks, large traders have been reducing their short positions and increasing long ones. Donald Trump's policies remain the most significant factor for traders, as they could cause numerous long-term structural problems for the U.S. economy. Despite the signing of several key trade agreements, some major economic indicators continue to show weakness.

News Calendar for the U.S. and Eurozone:

• Eurozone – Germany Services PMI (07:55 UTC)
• Eurozone – Services PMI (08:00 UTC)
• U.S. – ISM Services PMI (14:00 UTC)

The August 5 economic calendar includes three entries, of which the ISM Services PMI is considered the most important. The news background is expected to influence market sentiment throughout Tuesday.

EUR/USD Forecast and Trading Recommendations:

Selling the pair is possible today if it consolidates below 1.1558, targeting 1.1495 and 1.1416. Long positions can be held with targets at 1.1612 and 1.1645 as long as the price does not close below 1.1558.

Fibonacci levels are drawn from 1.1558 to 1.1789 on the hourly chart, and from 1.1214 to 1.0179 on the 4-hour chart.