On Thursday, the EUR/USD pair continued its upward movement and reached the 127.2% Fibonacci retracement level at 1.1712. A rebound from this level would favor the U.S. dollar and a potential decline toward the 1.1645 and 1.1574 levels. A daily close above 1.1712 would increase the likelihood of further growth toward the next level at 1.1802. So far, bears are showing no intention to reenter the market.

The wave pattern on the hourly chart remains simple and clear. The last completed downward wave broke slightly below the previous low, while the new upward wave easily surpassed the previous peak. Thus, the trend has once again shifted to bullish. The lack of progress in U.S.–China and U.S.–EU negotiations, the Fed meeting that didn't help the dollar, and the Middle East conflict that brought no benefit to the U.S. currency are all contributing to bearish hesitation. As expected, the bearish trend turned out to be short-lived and weak.

Thursday's news background was notable but mixed. The U.S. GDP report and durable goods orders data produced completely opposite results. While the U.S. economy contracted by 0.5% in Q1, durable goods orders surged by 16.4% m/m—twice the expected pace. In my view, the GDP report is far more important and points to a serious negative trend in the U.S. economy. Durable goods data, by contrast, reflects more of a one-off pattern than a structural shift. In addition to these reports, bulls had enough supportive headlines to continue their rally. Trump has once again floated the idea of firing Jerome Powell and continues to harshly criticize the Federal Reserve. Therefore, I believe a close above 1.1712 will allow bulls to maintain their offensive into Friday.

On the 4-hour chart, the pair reached the 1.1680 level. A sustained break below this level would favor the U.S. dollar and open the way to a decline toward the 127.2% Fibonacci level at 1.1495. However, the bullish trend within the ascending channel remains intact, and the dollar has little chance for a significant recovery. A firm close above 1.1680 would suggest further growth toward the 161.8% Fibonacci level at 1.1851. Currently, no signs of divergence are visible on any indicator.

Commitments of Traders (COT) Report:

Over the latest reporting week, professional traders opened 12,057 long positions and 3,529 short positions. The "Non-commercial" category remains firmly bullish thanks to Donald Trump and continues to strengthen. Speculators now hold 221,000 long positions versus 119,000 short positions, and the gap continues to widen with few exceptions. This indicates consistent demand for the euro and weak interest in the U.S. dollar.

For twenty consecutive weeks, large traders have been reducing their short positions and increasing their long ones. Although the ECB-Fed policy divergence is already substantial, traders are focusing more on Donald Trump's policies, which may trigger a U.S. recession and create a host of other long-term structural issues for the American economy.

U.S. and EU News Calendar:

• U.S. – Core PCE Price Index (12:30 UTC)
• U.S. – Personal Income and Spending (12:30 UTC)
• U.S. – University of Michigan Consumer Sentiment Index (14:00 UTC)

For June 26, the economic calendar includes three relatively minor events. Therefore, any market impact from the news is likely to be limited and may only appear in the second half of the day.

EUR/USD Forecast and Trading Recommendations:

Selling the pair is possible today upon a rebound from the 1.1712 level on the hourly chart, targeting 1.1645 and 1.1574. I previously recommended buying on a rebound from 1.1454 with a target of 1.1574. That target was reached, and a break above it allowed for further long positions with targets at 1.1645 and 1.1712—all of which have now been met. New buying opportunities may arise upon a close above 1.1712, targeting 1.1802.

The Fibonacci levels are drawn from 1.1574 to 1.1066 on the hourly chart and from 1.1214 to 1.0179 on the 4-hour chart.