On Friday, the EUR/USD pair traded very weakly, with trader activity extremely low due to the U.S. Independence Day. As a result, no trading signals, important breakouts, or other chart patterns were formed. Today, another rebound from the 1.1802 level (the third one) may work in favor of the U.S. currency and trigger a decline toward the 127.2% Fibonacci retracement level at 1.1712. A firm consolidation above 1.1802 would open the way for further growth toward the next Fibonacci level of 161.8% at 1.1888.

The wave structure on the hourly chart remains simple and clear. The last completed downward wave broke below the low of the previous one, while the most recent upward wave surpassed the previous high. Thus, the current trend remains bullish. The lack of real progress in U.S. trade negotiations and the low likelihood of trade agreements with most countries are forcing bears to hold back on initiating attacks.

There was no significant news background on Friday. In the Eurozone, Christine Lagarde gave yet another speech that offered no new information compared to her previous ones. However, toward the end of last week, Donald Trump announced his readiness to raise tariffs for all countries that fail to reach trade agreements with the U.S. As a result, tariffs may return this week to levels seen three months ago—meaning to their maximum. I believe that the tariff hike may trigger new bullish momentum, as Washington's trade policy has not softened over the past three months. Trump gave countries a chance to make deals, but his terms are unacceptable to most of them. In three months of negotiations, only three agreements have been signed. In my view, this indicates that the total number of deals will remain low, which suggests that Trump's "plan" is failing.

On the 4-hour chart, the pair consolidated above the 1.1680 level and continues to rise toward the next Fibonacci retracement level at 161.8% – 1.1851. A rebound from the 1.1851 level may work in favor of the U.S. dollar and trigger a minor decline within the current upward trend channel. A breakout above 1.1851 would increase the likelihood of continued growth toward the next level at 1.2066. A bearish divergence is forming on the RSI indicator.

Commitments of Traders (COT) Report:

During the most recent reporting week, professional traders opened 2,980 long positions and closed 6,602 short positions. The sentiment among 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 224,000, while short positions total 112,000. The gap between them (with rare exceptions) continues to widen. This means the euro remains in demand, while the dollar does not. The situation remains unchanged.

For twenty-one consecutive weeks, large players have been reducing short positions and increasing longs. The monetary policy divergence between the ECB and the Fed is significant, but Donald Trump's policies are a more important factor for traders, as they may trigger a recession in the U.S. economy along with many other long-term structural problems for the country.

News Calendar for the U.S. and the Eurozone:

• Eurozone – German Industrial Production (06:00 UTC)
• Eurozone – Retail Sales Change (09:00 UTC)

The economic calendar for July 7 contains two entries, neither of which is particularly important. The influence of the news background on market sentiment Monday may be extremely weak, and this data is unlikely to help the bears.

EUR/USD Forecast and Trader Tips:

Today, I would consider selling the pair in case of another rebound from the 1.1802 level on the hourly chart, with a target of 1.1712. I previously recommended buying after the rebound from 1.1454, with targets at 1.1574, 1.1645, 1.1712, and 1.1802—all of which have been achieved. New buy positions are possible if the pair consolidates above 1.1802, with a target of 1.1888.

Fibonacci levels are drawn from 1.1574–1.1066 on the hourly chart and from 1.1214–1.0179 on the 4-hour chart.