আরও দেখুন
17.08.2026 06:33 PM
EUR/USD remains within the local bearish impulse that began on April 17, but it is getting closer to completion with each passing day. The only thing missing for a fully established bullish trend is the invalidation of bearish Imbalance 17. This pattern could be invalidated soon. To do so, the price needs to break above the June 16 high. The fundamental backdrop remains unfavorable for the bears. The Nonfarm Payrolls and inflation reports showed results that significantly reduced the chances of FOMC monetary policy tightening. The Fed itself has already held two meetings with its new Chair, Kevin Warsh, and so far, both have ended with the Fed merely expressing concern about high inflation. The market had been pricing in tighter policy for almost a month and a half, but then began to conclude that a rate hike may not occur in the near future. The Fed may soon become concerned about the condition of the US labor market, and any rate hike would further weaken it. At the same time, the ECB may decide to raise interest rates again at upcoming meetings, as inflation in the European Union could accelerate again following a relatively calm July in the Middle East.
As I warned in recent weeks, if the labor market reports weak results again, this will be a sufficiently strong reason for the Fed to abandon a rate hike. Of course, this cannot be stated with complete certainty, as there is still at least one more inflation report and one more labor market report due before the September FOMC meeting. However, I am almost certain that the Fed will adopt a wait-and-see approach in September. Almost all traders are now abandoning their hawkish expectations for September.
Let me remind you that expectations of Fed monetary policy tightening are always just expectations and can change in response to geopolitical developments or economic data. The latest US labor market data showed weak results, inflation showed signs of slowing, and GDP growth weakened. These three factors raise doubts about an FOMC rate hike not only in September but also in the foreseeable future. If the Strait of Hormuz is reopened soon, this will only ease energy-related pressure and allow inflation to continue declining, further weakening the bears' outlook. In my view, the bears' only opportunity at present lies in a new escalation and a prolonged blockade of the Strait of Hormuz.
The current technical picture indicates that the bearish impulse remains in place. Bearish Imbalance 17 was filled, but the reaction to it was weak. Therefore, this pattern could be invalidated. A bullish Imbalance 19 has also formed, giving the bulls reason for optimism. If Imbalance 17 is invalidated while Imbalance 19 remains unfilled, traders will have to wait for new bullish patterns before considering long positions. A new bullish imbalance could form as early as today when the daily candle closes. At present, there are no grounds for short positions.
There was no significant economic data from the European Union or the US on Monday. Therefore, traders continued to follow the same direction based on previous reports and events. The fact that the bulls continue to advance without fundamental support is encouraging in my view. I expect the European currency to continue rising and the bullish trend to recover. Therefore, I welcome any further gains in the pair.
There remain many reasons for the bulls to advance in 2026, and the war in the Middle East has not reduced their number. Structurally and globally, Trump's policies, which led to a significant decline in the dollar last year, have not changed. At present, I see no significant factors supporting the US currency despite the FOMC's formally hawkish stance.
On August 18, the economic calendar contains six releases, but I would not consider any of them particularly important. The impact of the economic backdrop on market sentiment on Tuesday will most likely be limited.
In my view, the pair remains in the process of forming a bullish trend. The fundamental backdrop shifted sharply in favor of the bears five months ago, but the trend cannot be considered canceled or complete. Therefore, the bulls may well continue their advance after two liquidity sweeps from clearly defined lows. A sell signal may have formed within Imbalance 17, but the reaction was weak, so this pattern will most likely be invalidated. A bullish signal could form within Imbalance 19, but the price is moving increasingly farther away from this pattern. Despite the fairly strong rise in the euro, there is currently no suitable setup for opening long positions. Traders should wait for new bullish patterns to form, for Imbalance 19 to be filled, or trade the British pound for the time being.
