On Friday, EUR/USD made two rebounds from the 1.1637–1.1645 support zone and turned in favor of the euro. This means the upward movement could continue today toward the 76.4% Fibonacci retracement level at 1.1695. A consolidation below the 1.1637–1.1645 zone would work in favor of the U.S. dollar and a decline toward 1.1590 and 1.1544.

The wave structure on the hourly chart remains simple and clear. The last completed upward wave broke the high of the previous wave, and the last downward wave broke the previous low. At present, the trend can be considered bearish, but recently it has been changing too often due to the news background. Donald Trump managed to sign several favorable deals, which supported the bears, along with Jerome Powell's comments after the latest Fed meeting. However, the latest labor market data and the changing outlook for Fed monetary policy now support the bulls.

There was no news background on Friday, which explains the low trader activity. The same may be true today, as the economic calendar is empty. However, tomorrow the U.S. will release the July inflation report. In my view, despite increasing dovish expectations regarding the Fed's actions, inflation remains an important metric. The FOMC may be preparing to ease policy in September, but the longer-term outlook matters more. A single rate cut will not satisfy Donald Trump or solve the labor market problem. At the same time, if inflation continues to accelerate, the Fed is unlikely to proceed quickly with rate reductions. I believe the Fed will continue trying to balance inflation and the labor market. The labor market needs support, but inflation cannot be ignored. Therefore, two rate cuts before the end of the year remain the base scenario, and even this would not bode well for the dollar.

On the 4-hour chart, the pair turned in favor of the euro and rose to 1.1680 after forming two bullish divergences. A rebound from this level would work in favor of the U.S. dollar and a decline toward the 127.2% retracement level at 1.1495. A consolidation above 1.1680 would increase the likelihood of further growth toward the 161.8% Fibonacci level at 1.1854. No emerging divergences are currently observed on any indicator, and a consolidation below the ascending channel does not necessarily mean a bearish trend will form.

Commitments of Traders (COT) Report:

During the last reporting week, professional traders closed 1,848 long positions and opened 5,916 short positions. The sentiment of the "Non-commercial" group remains bullish, partly due to Donald Trump, and is strengthening over time. The total number of long positions held by speculators is now 247,000, while the number of short positions is 131,000 — almost a twofold difference. In addition, note the number of green cells in the table above, indicating a significant build-up of positions in the euro. In most cases, interest in the euro is increasing, while interest in the dollar is declining.

For 26 consecutive weeks, large market participants have been reducing short positions and increasing long positions. Donald Trump's policies remain the most significant factor for traders, as they could cause numerous long-term, structural problems for the U.S. Despite the signing of several important trade agreements, some key economic indicators are showing declines.

News Calendar for the U.S. and Eurozone:

On August 11, the economic calendar contains no notable events. The news background will not influence market sentiment on Monday.

EUR/USD Forecast and Trading Advice:

Selling the pair is possible today if the hourly close is below the 1.1637–1.1645 zone, with targets at 1.1590 and 1.1544. Long positions can be held with targets at 1.1695 and 1.1789 after a rebound from the 1.1637–1.1645 zone.

The Fibonacci grids are drawn from 1.1789 to 1.1392 on the hourly chart and from 1.1214 to 1.0179 on the 4-hour chart.