On Monday, the EUR/USD pair resumed its upward movement after consolidating above the 1.1645 level, as I had previously warned. A rebound from the 127.2% Fibonacci level at 1.1712 worked in favor of the U.S. dollar, so a minor decline is possible. However, if the pair consolidates above 1.1712, traders can expect continued growth toward the next target at 1.1802. In that case, the bearish trend will be officially over.

The wave structure on the hourly chart remains simple and clear. The last completed downward wave did not break the previous low, and the last upward wave did not break the previous high. Therefore, the trend remains bullish for now, despite the extended correction. The absence of substantial progress in U.S. trade negotiations, the low probability of agreements with most countries, and the ongoing risk of new tariff increases continue to create unfavorable conditions for sellers.

On Monday, the news background was generally neutral, but several developments during the day contributed to increased support for the euro. Over the weekend, Donald Trump stated that he expects tariffs on EU imports to rise to 15–20%, in addition to any trade deal. This confirmed the warnings from many analysts that trade agreements would not cancel tariffs. In other words, the trade war—one way or another—will continue. On Monday, it was also revealed that Trump is ready to impose tariffs of up to 30% on EU imports if a deal is not signed by August 1. While the EU is concerned about these potential measures, I believe Brussels will not blindly follow Trump's demands. Officials there acknowledge the strength of Trump's hand but insist that this does not mean everything will go the American president's way. As a result, bears began to retreat once again amid these two headlines and the long list of tariff increases Trump has announced in recent weeks.

The pair reversed in favor of the euro and consolidated above the 1.1680 level. Previously, the euro closed below the ascending trend channel. I still believe it's too early to draw conclusions about the beginning of a bearish trend. At the moment, the hourly chart is more informative. Prices exited the channel not because of bearish strength, but due to the length of the correction.

Commitments of Traders (COT) Report:

During the last reporting week, professional traders opened 971 new long positions and closed 6,654 short positions. The sentiment of the "Non-commercial" group remains bullish, driven largely by Donald Trump's policies, and continues to strengthen. The total number of long positions held by speculators now stands at 242,000, compared to only 113,000 short positions. That's more than a twofold difference. Also note the number of green cells in the table above—they show strong accumulation of euro positions. In most cases, interest in the euro is rising, which means interest in the dollar is declining.

For 23 consecutive weeks, major market players have been cutting short positions and adding longs. The monetary policy divergence between the ECB and the Fed is significant, but Trump's policies remain the dominant factor for traders, as they may trigger a recession in the U.S. economy and other long-term structural problems for the country.

News Calendar – U.S. and Eurozone:

• U.S. – Speech by Fed Chair Jerome Powell (12:30 UTC)

The July 22 economic calendar includes only one key event. The news background may influence market sentiment on Tuesday, as Powell's speeches are always closely watched.

EUR/USD Forecast and Trading Tips:

I do not recommend selling the pair today, as recent movements have been too weak and unstable. Buying was possible on a bounce from 1.1574 on the hourly chart with a target of 1.1645. Buying was also valid on a close above 1.1645, targeting 1.1712. Both targets have been met. Today, purchases can be considered either on a bounce from 1.1645 or on a close above 1.1712, with a target of 1.1802.

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