On Friday, the EUR/USD pair continued its decline after rebounding from the 50.0% Fibonacci retracement level at 1.1472. Over the past few weeks, traders have remained within the 1.1395–1.1472 level. Therefore, it is reasonable to expect that EUR/USD will continue trading within these boundaries today. A consolidation above the 1.1472 level would favor a continuation of the upward movement toward 1.1507 and 1.1551.

The wave structure on the hourly chart remains bearish despite the prolonged (but weak) advance by the bulls. The latest completed downward wave failed to break the previous low, while the latest upward wave has yet to exceed the previous high. Meanwhile, the geopolitical situation has deteriorated again, as Iran and the United States have resumed the blockade of the Strait of Hormuz and active military operations. A break above the 1.1473 high would confirm the end of the bearish trend, but for the past three weeks, the bulls have only demonstrated their weakness.

Friday's news flow was relatively light and failed to trigger any meaningful market reaction. Among the day's reports—none of which were particularly significant—the University of Michigan Consumer Sentiment Index stood out, coming in above market expectations. However, even this report failed to encourage the bears to launch a fresh attack. The market is in a classic stalemate: the bulls are unable to push higher, while the bears are unwilling to press lower—or perhaps the opposite. The current fundamental backdrop can be interpreted in different ways. If the U.S. dollar strengthens, few would be surprised, given the renewed conflict in the Middle East. If the euro appreciates instead, the explanation is equally straightforward: the European Central Bank (ECB) has begun tightening monetary policy, while the Federal Reserve is still only considering such a move. Overall, neither bulls nor bears currently hold a clear advantage. This week, the ECB will hold its monetary policy meeting, but the central bank is unlikely to raise interest rates for a second consecutive meeting. Therefore, I would not expect renewed bullish momentum following this event. The bulls largely ignored the ECB's policy tightening a month and a half ago, so there is little reason to expect them to become more active this week based solely on the ECB's policy.

On the 4-hour chart, the pair continues to trade sideways. A consolidation above the 1.1411 level would support the case for further gains, but price has been changing direction too frequently recently, while overall trading activity remains subdued. There are currently no emerging divergences on any of the technical indicators. The descending trend channel remains intact.

Commitments of Traders (COT) Report

During the latest reporting week, professional traders opened 6,877 long positions and 3,255 short positions. Over the seven weeks in February and March, the bulls' overwhelming advantage disappeared because of the war involving Iran. Over the past sixteen weeks, the market has become more balanced amid the temporary ceasefire and hopes for an end to the conflict. Speculators currently hold 230,000 long positions and 245,000 short positions.

From a longer-term perspective, large institutional traders continue to show strong interest in the euro. Naturally, the numerous global events seen in recent years continue to influence investor sentiment. In particular, market participants remain focused on developments in the Middle East, where the conflict repeatedly subsides and then escalates again. The market initially ignored the ceasefire and later also overlooked the resumption of hostilities. As a result, geopolitical factors are no longer the sole driver of the U.S. dollar's direction.

Economic Calendar for the U.S. and the Eurozone

The economic calendar for July 20 contains no notable events. As a result, macroeconomic data is unlikely to influence market sentiment on Monday.

EUR/USD Forecast and Trading Tips

Long positions may be considered today following a rebound from the 1.1395 level on the hourly chart, with targets at 1.1438 and 1.1472. Alternatively, buying opportunities may arise after a confirmed consolidation above 1.1472. Short positions may be considered following a consolidation below the 1.1395 level on the hourly chart, with a target at 1.1325. Market movements remain extremely subdued.

Fibonacci retracement levels are drawn from 1.1620–1.1325 on the hourly chart and from 1.1411–1.1850 on the 4-hour chart.