The wave structure on the hourly chart has become uncertain. The last completed downward wave did not break the previous low, while the most recent upward wave surpassed the previous peak. This could indicate a bullish trend shift or complex sideways movement, which is more evident on the 4-hour chart. The inconsistency in wave sizes adds uncertainty about the prevailing trend.

Tuesday's fundamental backdrop was weak, providing neither bulls nor bears with a clear advantage. The ZEW economic sentiment index for Germany came in at 26, above the 24.3 forecast, while the Eurozone index reached 24.2, slightly missing the expected 24.3. On the surface, these reports appear positive, but in reality, they do not signal strong economic momentum. Although the data improved, sentiment indicators do not carry the same weight as GDP or industrial production figures, which have been consistently disappointing.

As a result, bullish traders lacked new catalysts to continue their push on Monday and Tuesday. This situation is unlikely to change today. However, the FOMC meeting minutes in the evening could favor bearish traders. It is worth remembering that at the last Fed meeting, policymakers decided to keep interest rates unchanged, and Jerome Powell hinted that monetary easing would not happen in the near future.

EUR/USD rebounded from the 127.2% Fibonacci retracement level (1.0436) and consolidated above it. However, the 4-hour chart clearly shows that the pair has been moving sideways for most of 2025, suggesting a range-bound market. This means that from current levels or slightly higher, a resumption of the euro's decline remains a likely scenario. No divergence signals are observed in any indicators today.

Commitments of Traders (COT) Report

During the most recent reporting week, professional traders opened 3,040 long positions and 8,851 short positions. The non-commercial group maintains a bearish sentiment, suggesting a further decline in EUR/USD. Long positions among speculators now total 165,000, while short positions have risen to 230,000.

For 21 consecutive weeks, large investors have reduced their euro holdings, reinforcing a bearish trend. Occasionally, bullish sentiment dominates for a week or two, but this remains an exception rather than the rule.

The main factor driving the dollar lower in previous months was expectations of Fed rate cuts, but this has already been priced in. Without new catalysts, the market has no immediate reason to sell the dollar. Long-term technical analysis also supports the continuation of a bearish trend, making further declines in EUR/USD the most likely scenario.

Key Economic Events (US & Eurozone)

• US Building Permits (13:30 UTC)
• US New Home Sales (13:30 UTC)
• FOMC Meeting Minutes (19:00 UTC)

While the economic calendar contains three notable events, their market impact is likely to be minimal. The FOMC minutes will be the most important release of the day, potentially reinforcing hawkish sentiment and pressuring EUR/USD lower.

Trading Outlook and Forecast for EUR/USD

Sell positions can be considered on a rebound from 1.0458 on the hourly chart, with targets at 1.0435 and 1.0411.

Buy positions are possible if the pair closes above 1.0458, but given the sideways range on the 4-hour chart, selling remains the more logical strategy near resistance.

Fibonacci retracement levels are drawn from 1.0533 – 1.0213 on the hourly chart and from 1.0603 – 1.1214 on the 4-hour chart.