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31.03.2025 11:58 AM
EUR/USD. March 31st. The Dollar Has No Chance

On Friday, the EUR/USD pair consolidated above the 1.0781–1.0797 zone, allowing the upward movement to continue toward the 200.0% Fibonacci level at 1.0857. A rebound from this level would favor the US dollar and lead to a slight decline toward the support zone at 1.0781–1.0797. A consolidation above 1.0857 would open the way for further growth toward the next level at 1.0944. Bulls are attacking again and are fully entitled to do so.

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The wave situation on the hourly chart has changed. The last completed upward wave broke the previous peak by just a few points, while the last downward wave broke the previous low. This currently indicates a gradual trend reversal toward a bearish direction. However, Donald Trump introduced new tariffs last week, causing the bears to retreat once again. Trump is likely to introduce tariffs again this week, giving the bulls another opportunity to launch an offensive.

Friday's news background was interesting, but the events of Wednesday and Thursday were far more significant for traders. It was announced that Donald Trump had imposed tariffs on all car imports into the US, which enabled the bulls to launch a new offensive. After that event, other news had little weight in the eyes of traders. For example, a decent US GDP report for Q4 didn't help the dollar, and the euro didn't fall even after weak unemployment data from Germany. Thus, I fully agree with the majority of analysts who believe that the only reason for the US dollar's decline is Donald Trump. It's not hard to assume that new tariffs will trigger another fall in the dollar. Many already expect a significant slowdown or even a recession in the US economy. Naturally, the dollar cannot remain in demand if the economy is set to slow sharply, and the dollar is no longer considered a "safe haven" asset.

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On the 4-hour chart, the pair reversed in favor of the euro and consolidated above the 61.8% Fibonacci correction level at 1.0818. Thus, the upward trend may resume toward the 76.4% Fibonacci level at 1.0969. The bullish trend remains intact, and no signs of divergence are currently observed in any indicator.

Commitments of Traders (COT) Report:

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During the last reporting week, professional traders opened 844 Long positions and closed 5,256 Short positions. The sentiment of the "Non-commercial" group has turned bullish again—thanks to Donald Trump. The total number of Long positions held by speculators now stands at 190,000, while Short positions total 124,000.

For twenty consecutive weeks, large players were reducing their euro holdings, but now for seven weeks in a row, they have been unwinding Shorts and increasing Longs. The divergence in monetary policy approaches between the ECB and the Fed still favors the US dollar due to rate differentials. However, Donald Trump's policies have become a more significant factor for traders, as they may prompt dovish shifts in the FOMC's stance and potentially trigger a US recession.

Economic calendar for the US and the Eurozone:

Eurozone – Germany Retail Sales Change (08:55 UTC) Eurozone – Germany Consumer Price Index (12:00 UTC) US – Chicago PMI (13:45 UTC)

On March 31, the economic calendar contains three entries, with only the German inflation data drawing notable attention. The influence of the news background on market sentiment may remain weak on Monday.

EUR/USD Forecast and Trader Tips:

Short positions are possible today upon a rebound from the 1.0857 level on the hourly chart, with targets at 1.0734. Long positions may be considered upon a rebound from the 1.0781–1.0797 zone on the hourly chart with a target at 1.0857, or upon a close above 1.0857 with a target at 1.0944.

Fibonacci levels are drawn from 1.0529–1.0213 on the hourly chart and from 1.1214–1.0179 on the 4-hour chart.

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