The wave structure remains generally clear. The last completed upward wave broke above the previous wave's peak. The latest downward wave breached the lows of the two previous waves.

Thus, the trend is either shifting to a bearish phase or we're observing a complex sideways movement on higher timeframes.

Monday brought a wealth of news, making it difficult to pinpoint which specific events had the greatest impact on trader sentiment. Donald Trump imposed tariffs on Mexico, China, and Canada all in one day. However, by evening, it was announced that Mexico and Canada had temporarily avoided these tariffs.

In the Eurozone, the Consumer Price Index (CPI) for January rose to 2.5%, while core inflation hit 2.7%. Although this acceleration was mild, it may have provided some support for the bulls. Manufacturing PMIs for Germany and the Eurozone also delivered positive figures, though both indices remained well below the 50.0 level. The U.S. ISM Manufacturing PMI rose to 50.9 points in January.

Despite nearly all reports being positive, only the bulls were active throughout the day. This was likely a reaction to the overnight collapse in the euro. I still believe that Monday's movements were primarily a response to Trump's decisions, while other economic data merely provided traders with future insights for upcoming trades.

Today began with a euro decline, but subsequent movements are expected to be calmer and more technical.

On the 4-hour chart, the pair reversed in favor of the U.S. dollar after forming a bearish divergence on the CCI indicator, dropping towards the 161.8% retracement level at 1.0225. A rebound from this level favored the euro, pushing the pair towards 1.0332. However, another rebound from 1.0332 could signal a new decline towards 1.0110. No emerging divergences are observed on any indicators today.

Commitments of Traders (COT) Report:

In the last reporting week, professional traders closed 14,005 long contracts and 9,887 short contracts. The sentiment of the Non-commercial group remains bearish, suggesting a continued decline for the pair. The total number of long positions held by speculators now stands at 153,000, while short positions total 220,000.

For nineteen consecutive weeks, large players have been selling the euro. This indicates a bearish trend without exceptions. While bulls occasionally dominate during specific weeks, these are more likely anomalies rather than the norm.

The key factor for the dollar's previous decline—expectations of FOMC monetary policy easing—has already been priced in. The market now lacks reasons to continue selling the dollar. While new factors may emerge over time, the growth of the U.S. currency remains more likely. Technical analysis also indicates the continuation of the long-term bearish trend. Therefore, I expect further declines in the EUR/USD pair.

News Calendar for the U.S. and the Eurozone:

• U.S. – JOLTS Job Openings (15:00 UTC).

On February 4, the economic calendar includes only one significant event. The information background may have a moderate influence on market sentiment, particularly in the second half of the day.

EUR/USD Forecast and Trading Tips:

Selling the pair could have been initiated with targets at 1.0315 and 1.0263 after the rebound from the 1.0346–1.0356 zone on the hourly chart. Buying is not advisable today, as the pair has closed below the ascending channel on the hourly chart.

Fibonacci Levels:

• Hourly chart: Levels are drawn from 1.0179 to 1.0533.

4-hour chart: Levels are drawn from 1.0603 to 1.1214.