The EUR/USD pair continued its decline throughout Friday and by the end of the day worked off the 127.2% corrective level of 1.1440. A consolidation of quotes below this level will increase the probability of further decline of the pair toward the levels 1.1374 and 1.1282. A rebound of the pair's rate from 1.1440 will work in favor of the European currency and give a small respite to the bulls, who continue to rapidly lose positions.

The wave situation on the hourly chart remains clear. The last completed upward wave broke the peak of the previous wave by only a few points, and the new downward wave broke the previous low. Thus, the trend at the moment remains "bearish." The actions of Donald Trump in the Middle East have provoked large-scale military actions in the region involving a dozen countries, which allowed and continues to allow the dollar to demonstrate growth as a "safe-haven currency."

On Friday, economic reports again did not have a significant impact on traders' sentiment, although some of them strongly suggested pressing the "sell the dollar just in case" button. But no—the American currency continues to grow, and traders continue to ignore weak economic data from the United States. Over the weekend it became known that France and Italy initiated their own negotiations with Iran regarding opening the Strait of Hormuz for their vessels. Overall, this is a logical scenario for developments, although few could have predicted it. Let me remind you that the war with Iran was started by Israel and the United States, while countries of the European Union are forced to reap the consequences of Trump's aggression in the form of extremely high oil and gas prices. Washington once again wants to form a coalition of Western states to resolve its own problems and ambitions. And the fate of the war in the Middle East depends on the will of one person. Therefore Paris and Rome concluded that they cannot work effectively with Donald Trump, and that they should solve their own problems independently. After all, European states did not strike Iran, and according to the latest data most EU countries refused Trump the use of their airfields and military bases to carry out attacks on Iran and its allies. No one wants to follow Trump. America is far away and energy secure, while Europe is much closer and fully dependent on energy supplies.

On the 4-hour chart, the pair secured a position below the 100.0% corrective level at 1.1474 according to the new Fibonacci grid. Thus, the decline process may continue toward the next Fibonacci level 127.2% – 1.1310. The downward trend channel continues to indicate the complete dominance of the bears. No new emerging divergences are observed on any indicator.

Commitments of Traders (COT) Report

During the last reporting week, professional players closed 28,900 Long positions and opened 2,454 Short positions. The sentiment of the "Non-commercial" group remains "bullish" thanks to Donald Trump and his policies, but in recent weeks we have been observing an active reduction of Long positions. The total number of Long positions held by speculators is now 266 thousand, while Short positions total 160 thousand. The bulls' advantage remains significant, but they are rapidly losing ground.

Overall, in the long term, large players continue to view the euro currency with considerable respect. Of course, various global events—which have not been lacking in recent years—affect investors differently. In particular, the market's attention is currently focused on the Middle East, where the war continues to gain momentum and expand geographically. Thus, in the near future the exchange rate of the euro and the dollar will depend not on the monetary policy of the Federal Reserve or economic data, but on the war in Iran. And for now, the dollar is extracting maximum benefit from this situation.

News Calendar for the U.S. and the Eurozone

• United States – Change in Industrial Production (13:15 UTC).

On March 16, the economic calendar contains only one not very significant entry, and the market continues to ignore any reports. The influence of the information background on market sentiment on Monday may be extremely weak.

EUR/USD Forecast and Trading Advice

Selling the pair was possible after a close below the 1.1577 level with a target of 1.1440. The target has been reached. These trades can be kept open today with targets of 1.1374 and 1.1282. Buy trades can be opened in the event of a rebound of quotes from the 1.1440 level with a target of 1.1577.

Fibonacci level grids are built from 1.1577 – 1.2082 on the hourly chart and from 1.1474 – 1.2082 on the 4-hour chart.