On Friday, the EUR/USD pair rebounded from the 50.0% retracement level at 1.1590, reversed in favor of the European currency, and surged above the peaks of all previous waves. The pair consolidated above the 76.4% retracement level at 1.1695, which allows traders to expect continued growth toward the next 100.0% Fibonacci level at 1.1789. A consolidation of quotes below 1.1695 on Monday would work in favor of the U.S. currency and a decline toward the support level of 1.1637–1.1645.

The wave situation on the hourly chart remains simple and clear. The last completed downward wave did not break the previous lows, while the last upward wave broke almost all recent peaks. Thus, at this point, the trend may once again shift to "bullish." The latest labor market data and changing Fed monetary policy expectations are supporting bullish traders.

On Friday, the only economic data of note was Germany's final Q2 GDP. It turned out that the economy lost 0.3%, not 0.1% as previously estimated. That alone could have been a reason for bears to attack. But traders had been waiting all day for one event — and it was not the German GDP report. In the evening, Jerome Powell delivered his speech, touching on many issues related to recent statistics and the future of Fed monetary policy. In fact, the FOMC Chair did not give any clear hints of a September rate cut and made no long-term forecasts. But the market interpreted his words about a "possible rate cut in the future" as a signal to sell the dollar at any price. After Powell's speech, traders grew more doubtful about a September rate cut, but this did not save the dollar, which collapsed once again across the market. Powell genuinely tried to keep his speech neutral, without promises to cut or hold the rate, but, as we can see, traders needed just any excuse.

On the 4-hour chart, the pair performed another reversal in favor of the euro and consolidated above 1.1680. This level has been crossed frequently by price lately, so I do not recommend focusing on it. The hourly chart is much more informative and clearer, with more levels available. No emerging divergences are observed today in any indicator.

Commitments of Traders (COT) Report:

During the latest reporting week, professional players opened 6,420 long positions and 3,106 short positions. The sentiment of the "Non-commercial" group remains bullish, thanks to Donald Trump, and is strengthening over time. The total number of long positions held by speculators now stands at 253,000, while short positions total 134,000. The gap is nearly twofold. In addition, note the number of green cells in the table above, reflecting strong increases in euro positions. In most cases, interest in the euro continues to rise, while interest in the dollar declines.

For twenty-eight consecutive weeks, large players have been reducing shorts and adding longs. Donald Trump's policies remain the most influential factor for traders, as they may cause numerous long-term structural problems for the U.S. Despite the signing of several major trade agreements, some key economic indicators are showing decline.

News Calendar for the U.S. and Eurozone:

• Eurozone – Ifo Business Climate Index in Germany (08:00 UTC).

On August 25, the economic calendar contains only this entry, but it is unlikely to attract traders' interest. The news background will not influence market sentiment on Monday.

Forecast for EUR/USD and Trading Tips:

Short positions may be considered today if the pair closes below 1.1695 on the hourly chart, targeting 1.1637–1.1645. Long positions could have been opened on a rebound from 1.1590 on the hourly chart, with targets at 1.1637–1.1645 and 1.1695. All of these targets were already reached on Friday. Today, long positions will be possible on a rebound from 1.1695 with a target at 1.1789.

The Fibonacci grids are built on 1.1789–1.1392 on the hourly chart and 1.1214–1.0179 on the 4-hour chart.