On Wednesday, the EUR/USD pair continued its decline after consolidating below the 100.0% Fibonacci retracement level at 1.1411, moving toward the 127.2% Fibonacci level at 1.1291. A rebound from 1.1291 would allow traders to expect a reversal in favor of the euro and a moderate rise toward 1.1411. Consolidation below 1.1291 would increase the likelihood of a further decline toward the next Fibonacci retracement level at 161.8% – 1.1139.

The wave structure on the hourly chart remains bearish. The latest completed upward wave broke above the previous peak, while the latest downward wave broke below the previous low and is still developing. Geopolitical conditions have improved considerably in recent weeks; however, the Federal Reserve triggered a new wave of bearish pressure that has yet to subside. A full-scale bearish continuation would require additional factors, which I do not currently see, but bulls are offering virtually no resistance at the moment.

Wednesday could easily have become a quiet trading day for market participants, with little activity in either the euro or the U.S. dollar. However, bears decided not to stop and continued their selling pressure. Only by the evening did sellers pause, allowing the euro to stage a modest rebound. The news background was virtually absent throughout the day, apart from several secondary reports that could not have had any meaningful impact on the pair's movement.

As a result, we have witnessed a week-long decline in the euro and a rise in the dollar, leading to the formation of bullish divergences on the CCI indicator and strong oversold signals on the RSI indicator. It is worth noting that the RSI rarely enters overbought or oversold territory, so each such signal deserves close attention. In my opinion, the recent appreciation of the dollar has not been justified by the fundamental backdrop when considering all factors, including the latest ECB meeting, Christine Lagarde's stance, the end of the conflict in the Middle East, the reopening of the Strait of Hormuz, the launch of nuclear negotiations, and falling oil prices.

On the 4-hour chart, the pair consolidated below the 100.0% Fibonacci retracement level at 1.1411, allowing traders to expect a further decline in the euro. A bullish divergence has formed on the CCI indicator, while the RSI is signaling oversold conditions, both of which could halt the bears' advance. For now, however, these remain only technical signals on the chart. Bears continue to ignore them and maintain downward pressure.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 8,441 Long positions and closed 11,980 Short positions. During the seven-week period in February and March, the bulls' overwhelming advantage disappeared due to the war involving Iran. Over the past twelve weeks, however, the situation has normalized as hostilities in the Middle East have eased, and bulls have once again regained the upper hand. The total number of Long positions held by speculators now stands at 228,000, compared with 193,000 Short positions.

Overall, from a long-term perspective, large institutional traders continue to view the euro favorably. Naturally, global developments of various kinds—which have certainly not been in short supply in recent years—continue to influence investor sentiment. At present, the market's attention remains focused on the Middle East, where military activity has paused and serious negotiations have begun that may ultimately lead to peace. Nevertheless, the market continues to ignore the improvement in geopolitical conditions, as well as many other factors that support the euro.

News Calendar for the United States and the European Union:

• Germany – GfK Consumer Confidence Index (06:00 UTC).
• U.S. – Core PCE Price Index (12:30 UTC).
• U.S. – Durable Goods Orders (12:30 UTC).
• U.S. – First-Quarter GDP (12:30 UTC).
• U.S. – Initial Jobless Claims (12:30 UTC).

The economic calendar for June 25 contains five releases, with U.S. GDP standing out as the key event. Economic data may influence market sentiment on Thursday, but traders can clearly see that economic reports are not the primary driver of the current market movement.

EUR/USD Forecast and Trading Tips:

Long positions may be considered today if the pair rebounds from the 1.1290 level on the hourly chart, targeting 1.1409. Short positions could previously have been opened after a close below 1.1578 and again after a close below 1.1514, with a target at 1.1409. That target has already been reached. New short positions could have been opened after a close below 1.1409, targeting 1.1291. Today, those positions may be closed, as the dollar cannot continue rising indefinitely.

Fibonacci grids are drawn from 1.1409 to 1.1850 on the hourly chart and from 1.1411 to 1.1850 on the 4-hour chart.