The EUR/USD pair closed above the 100.0% Fibonacci retracement level at 1.1409 for the third time on Tuesday, and then closed below it for the third time early Wednesday. This suggests that traders remain undecided about the pair's direction, making the 1.1409 level unreliable for generating trading signals. Market activity is currently subdued as traders await key economic data from the eurozone and the United States. The first reports are due later today.

The wave structure on the hourly chart remains bearish. The latest completed downward wave broke below the previous low, while the most recent upward wave failed to exceed the previous high. The geopolitical environment has improved considerably in recent weeks, as the conflict in the Middle East has at least paused, and Iran and the United States have signed a preliminary agreement. However, first the Federal Reserve's policy stance, and then developments surrounding the negotiations between Iran and the United States, triggered renewed demand for the U.S. dollar. Although a document has been signed, there has been no meaningful progress in the negotiations.

Tuesday's news flow was relatively weak despite the large volume of economic data released. Germany published reports on retail sales, inflation, and unemployment, while the United States released the JOLTS job openings report. However, none of these data attracted traders' attention. The latest developments in the Middle East also failed to influence the market. Talks between Tehran and Washington were expected to take place in Qatar, but Tehran declined a face-to-face meeting with U.S. officials. As a result, the negotiations did not take place. Tehran is demanding that the United States fulfill the terms of the memorandum before discussions can proceed to the next stage. Overall, the situation remains at a standstill. Today, market participants will shift their focus to speeches by central bank officials and the eurozone inflation report. The ECB's July policy decision will largely depend on how high inflation proves to be in June. For now, I continue to see the bears maintaining control.

On the 4-hour chart, the pair has consolidated below the 100.0% Fibonacci retracement level at 1.1411, allowing traders to expect a further decline in the euro. At the same time, the CCI indicator has formed a bullish divergence, while the RSI indicates overbought conditions, both of which have temporarily halted the bears' advance. A close above 1.1411 would strengthen the case for further gains in the euro and a return to the descending trend channel.

Commitments of Traders (COT) Report:

During the latest reporting week, institutional traders opened 19,327 long positions and 23,522 short positions. Over the seven weeks spanning February and March, the bulls' overwhelming advantage disappeared due to the conflict involving Iran. During the past thirteen weeks, the situation has gradually stabilized as hostilities in the Middle East have eased, allowing the bulls to regain the upper hand. Speculative traders now hold a total of 247,000 long positions versus 217,000 short positions.

Overall, large institutional traders continue to favor the euro over the long term. Naturally, the numerous global events that have emerged in recent years continue to influence investor sentiment. At present, the market's attention remains focused on the Middle East, where military operations have paused and serious negotiations have begun that could eventually lead to lasting peace. Nevertheless, the market continues to ignore the improving geopolitical environment, as well as several other factors that remain supportive of the euro.

News Calendar for the United States and the Eurozone:

Eurozone – Consumer Price Index (09:00 UTC).
United States – ADP Employment Change (12:15 UTC).
Eurozone – Speech by ECB President Christine Lagarde (13:00 UTC).
United States – Speech by FOMC member Kevin Warsh (13:00 UTC).
Eurozone – Speech by ECB President Christine Lagarde (14:00 UTC).
United States – ISM Prices Paid Index (14:00 UTC).

The economic calendar for July 1 contains six scheduled events, at least four of which can be considered significant. As a result, the fundamental backdrop may influence market sentiment throughout the day.

EUR/USD Forecast and Trading Tips:

Long positions may be considered today if the pair closes above the 1.1409 level on the hourly chart, with a target at 1.1514. New short positions became possible after a close below 1.1409 on the hourly chart, targeting 1.1290. However, the last six trading signals generated around this level have failed to produce any meaningful price movement.

The Fibonacci grids are constructed using 1.1409–1.1850 on the hourly chart and 1.1411–1.1850 on the 4-hour chart.

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