On Friday, the EUR/USD pair rebounded from the 127.2% Fibonacci retracement level at 1.1712, reversed in favor of the U.S. dollar, and resumed its decline toward the 1.1645 level. A rebound from this level would support a reversal in favor of the euro and a moderate rise toward 1.1712. A close below 1.1645 would increase the likelihood of a further decline toward the next retracement level of 100.0% at 1.1574. Let me remind you that I do not consider the 1.1712 level for trading signals.

The wave pattern on the hourly chart remains simple and clear. The most recent completed upward wave broke above the previous peak, while the new downward wave hasn't come close to the previous low. Thus, the trend remains bullish. The lack of real progress in U.S. trade negotiations, the low likelihood of trade agreements with most countries, and the new round of tariff hikes continue to cast a shadow on bearish prospects.

There was no significant news from the EU or the U.S. on Friday, but last week Donald Trump announced a large batch of new import tariffs. This week has started in a similar tone: Trump raised import tariffs on goods from the European Union to 30%. As in previous cases, the new tariffs will come into force on August 1. Trump's overall policy on this issue is crystal clear. He aims to secure trade deals that retain tariffs but are favorable to the U.S. To obtain these deals, he uses tariffs as a pressure tool against his opponents. The repeated delays in implementing tariff hikes give trade partners more time and push them to negotiate faster and with more flexibility. Therefore, it is still too early to talk about actual tariff increases — they will take effect only on August 1. Bulls understand this and are in no rush to reenter the market aggressively. Bears have room to act for now, but their attacks are weak and lack momentum.

On the 4-hour chart, the pair has returned to the 1.1680 level. A rebound from this level would support the euro and a resumption of upward movement toward the next Fibonacci retracement level of 161.8% at 1.1851. A close below this level would open the path toward the lower boundary of the ascending trend channel. There are currently no signs of divergence on any indicators.

Commitments of Traders (COT) Report:

Over the latest reporting week, professional traders opened 1,188 new long positions and 4,786 short positions. The sentiment among the "Non-commercial" group remains bullish, thanks to Donald Trump, and has only strengthened over time. The total number of long positions held by speculators is now 225,000, while short positions stand at 117,000. The gap (with rare exceptions) continues to widen. Thus, the euro remains in demand, while the dollar does not. The situation remains unchanged.

For 22 consecutive weeks, large players have been reducing short positions and increasing longs. Despite a significant divergence in monetary policy between the ECB and the Fed, Trump's trade policies are a more influential factor for traders. His actions risk triggering a recession in the U.S. economy and other long-term structural problems for America.

News calendar for the U.S. and the EU:On July 14, the economic calendar contains no major entries. As such, the news backdrop will not influence market sentiment on Monday.

EUR/USD Forecast and Trader Recommendations:I would not consider selling the pair today, as recent price movements have been too weak and unstable. Buying is possible after a rebound from the 1.1645 level on the hourly chart with a target of 1.1712, as bulls still appear to have a significantly stronger position than bears.

Fibonacci levels were plotted from 1.1574 to 1.1066 on the hourly chart and from 1.1214 to 1.0179 on the 4-hour chart.