During Monday's session, the EUR/USD pair reversed in favor of the euro and consolidated above the 100.0% corrective level at 1.1577. As a result, the upward movement may continue today toward the next corrective level at 76.4% – 1.1696. For the first time in a while, buyers may gain the initiative, but they still need to push the price several dozen points higher. A consolidation below 1.1577 would favor the U.S. dollar and lead to a renewed decline toward the 127.2% Fibonacci level at 1.1440.

The wave structure on the hourly chart remains straightforward. The last completed upward wave failed to break the previous peak, while the most recent downward wave confidently broke the previous low. Therefore, the overall trend remains bearish. Actions taken by Donald Trump in the Middle East triggered large-scale military activity involving about a dozen countries, which allowed the U.S. dollar to strengthen as a safe-haven currency. However, if the war ends soon, buyers could begin to take control.

On Monday, there were very few economic releases, and those that did appear did not attract much interest from traders. During the night, the U.S. dollar strengthened sharply as oil prices rose significantly. However, later in the day oil prices declined, Donald Trump promised to address the global shortage of oil and gas caused by the conflict in the Middle East, and later stated that the war with Iran was approaching its end. At this stage, it is difficult to determine what objectives Trump achieved through this conflict, as there have been no reports about the destruction of Iran's nuclear facilities or nuclear stockpiles. The one clear result so far has been a major energy shock affecting many countries worldwide.

The U.S. leader also announced a partial and temporary lifting of sanctions on Russia in order to stabilize the oil market. Trump added that it may not be necessary to reinstate these sanctions in the future. Peace negotiations between the United States, Russia, and Ukraine are continuing, with another round scheduled for March 11. As a result, Russia has already secured the removal of part of the sanctions, and successful negotiations with Ukraine and the United States could lead to the removal of the remaining restrictions. Oil prices are declining, and the dollar is weakening as geopolitical tensions ease.

On the 4-hour chart, the pair reversed in favor of the euro and rose toward the 38.2% Fibonacci level at 1.1642. A consolidation above this level would allow expectations of further growth toward 1.1694 and 1.1748 within the downward trend channel. A rebound from 1.1642 would favor the U.S. dollar and lead to renewed declines toward the 0.0% correction level at 1.1471. No emerging divergences are currently visible on any indicators.

Commitments of Traders (COT) Report

During the latest reporting week, professional traders closed 287 long positions and opened 20,071 short positions. Sentiment among the Non-commercial group remains bullish, largely influenced by Donald Trump and his policies, although in recent weeks long positions have been declining. The total number of long positions held by speculators currently stands at 294,000, while short positions amount to 158,000. The advantage of buyers remains nearly twofold.

Overall, in the longer term large market participants continue to reduce short positions and increase long positions. Various global events—of which there has been no shortage in recent years—continue to influence investor sentiment. At present, market attention is focused on the Middle East, where the conflict continues to escalate and expand geographically. Therefore, in the near future the dynamics of the euro and the dollar will depend less on Federal Reserve monetary policy or economic data and more on the developments in the conflict involving Iran.

Economic Calendar (U.S. and EU)

• Germany – Trade Balance (07:00 UTC)
• United States – ADP Weekly Employment Report (12:15 UTC)
• United States – New Home Sales (14:00 UTC)

The economic calendar for March 10 contains three secondary events. Therefore, the impact of the news flow on market sentiment on Tuesday is expected to be minimal or absent.

EUR/USD Forecast and Trading Advice

Selling opportunities previously appeared after a rebound from 1.1830 on the hourly chart with targets at 1.1770, 1.1696, and 1.1577. All targets have been reached. New short positions may be considered if the pair closes below 1.1577 with a target at 1.1440, although bearish momentum appears to be weakening.

Buy positions could be opened after a consolidation above 1.1577 with a target at 1.1696. These positions can still be held today.

Fibonacci grids are drawn from 1.1805–1.1578 on the hourly chart and from 1.1919–1.1471 on the 4-hour chart.