On Thursday, the EUR/USD pair rebounded from the 38.2% corrective level at 1.1686, reversed in favor of the European currency, and rose with consolidation above the 23.6% Fibonacci level at 1.1731. Thus, today the growth process may continue toward the next corrective level at 0.0% – 1.1805. A consolidation of the pair below the 1.1731 level would work in favor of the U.S. dollar and a resumption of the decline toward 1.1686 and 1.1648.
The wave situation on the hourly chart remains straightforward. The last completed upward wave broke the peak of the previous wave, while the last downward wave failed to break the previous low. Thus, the trend remains "bullish." The bulls have launched a new offensive, which might not have happened without Donald Trump. Trump has heated up the situation around Greenland to the limit, and the markets reacted by fleeing risky American assets amid uncertain economic prospects.
On Thursday, the U.S. dollar—around which everything currently revolves in the market—could have counted on renewed growth. Donald Trump replaced anger with mercy and decided, for now, not to introduce new tariffs against European countries, as an agreement on Greenland was reportedly reached with NATO Secretary General Mark Rutte. Details of the agreement are not yet available, but the deal generated nothing but skepticism among traders. The bears did not move into a logical attack, and the U.S. GDP report did not change traders' attitudes toward Donald Trump's policies. Thus, the market made it clear that U.S. economic growth of 4.4% quarter-on-quarter is not a guarantee of success for the dollar. Traders understand that Trump's nature is too changeable and unpredictable. On Monday, Trump introduced new tariffs; a few days later, he canceled them. What would prevent the U.S. president from reinstating them tomorrow? And at the same time, making claims to the territories of other states that are "important to U.S. national security"? All these events, regardless of how they are framed, only create additional pressure on the dollar.
On the 4-hour chart, the pair reversed in favor of the European currency and consolidated above the 1.1649–1.1680 level. Thus, the growth process may continue toward the next Fibonacci level at 0.0% – 1.1829. A new close of quotes below the 1.1649–1.1680 level would work in favor of the U.S. dollar, but it is quite difficult to imagine dollar growth under the current circumstances. No emerging divergences are observed today on any indicator.
Commitments of Traders (COT) report:
During the last reporting week, professional players closed 14,661 long positions and opened 15,495 short positions. The sentiment of the "Non-commercial" group remains bullish thanks to Donald Trump and his policies, and it continues to strengthen over time. The total number of long positions held by speculators now stands at 283,000, while short positions total 151,000. This represents nearly a twofold advantage for the bulls.
For thirty-three consecutive weeks, large players were getting rid of short positions and increasing longs. Then the "shutdown" began, and now we see the same picture again: professional traders continue to build long positions. Donald Trump's policy remains the most significant factor for traders, as it creates numerous problems that will have long-term and structural consequences for America—for example, a deterioration in the labor market. Traders fear a loss of Federal Reserve independence in 2026 under pressure from Trump and amid the resignation of Jerome Powell.
News calendar for the United States and the European Union:
- European Union – German Manufacturing PMI (08:30 UTC)
- European Union – German Services PMI (08:30 UTC)
- European Union – Manufacturing PMI (09:00 UTC)
- European Union – Services PMI (09:00 UTC)
- European Union – Speech by ECB President Christine Lagarde (10:00 UTC)
- United States – Manufacturing PMI (14:45 UTC)
- United States – Services PMI (14:45 UTC)
- United States – University of Michigan Consumer Sentiment Index (15:00 UTC)
On January 23, the economic calendar contains eight entries, each of which is of certain interest. The impact of the news background on market sentiment on Friday may persist throughout the day.
EUR/USD forecast and trading advice:
Selling the pair is possible today if the hourly chart closes below the 1.1731 level, with targets at 1.1686 and 1.1648. Buying opportunities arose after a rebound from the 1.1686 level on the hourly chart, with targets at 1.1731 and 1.1802. The first target has been reached; long positions can be kept open.
Fibonacci grids are drawn from 1.1492–1.1805 on the hourly chart and from 1.1066–1.1829 on the 4-hour chart.
