On Thursday, the EUR/USD pair continued its decline, consolidating below the support zone of 1.0336–1.0346 and testing the 127.2% corrective level at 1.0255. A rebound from this level favored the euro, initiating growth toward the now-resistance zone of 1.0336–1.0346. A rebound from this zone could again bolster the US dollar.

The wave structure remains clear. The last completed upward wave failed to surpass the previous peak, while the most recent downward wave easily broke the previous low. Thus, a bearish trend continues to form, with no signs of reversal. To signal a trend change, the euro must rise decisively above the 1.0460 level.

On Thursday, key manufacturing PMIs were released across the Eurozone, UK, and US but had no significant impact on trader sentiment. The bearish market dynamics persisted, driven by a strong downward trend. Dollar strength is supported by Donald Trump, the Federal Reserve, and strong economic fundamentals. Other data remain secondary.

However, major reports such as ISM or Nonfarm Payrolls showing weak figures could trigger USD selling pressure. Over the past few weeks, the dollar has benefited from the Federal Reserve's less dovish-than-expected stance revealed during the December FOMC meeting, maintaining trader confidence.

On the 4-hour chart, the pair rebounded twice from the 127.2% corrective level at 1.0436. The downtrend resumed, targeting the 161.8% Fibonacci level at 1.0225, which has already been tested. No divergence signals are present on any indicators, and the trend channel does not suggest significant euro recovery. A rebound from 1.0225 has temporarily supported the euro, though any upward movement is likely to remain weak.

Commitments of Traders (COT) Report:

In the latest week, speculators closed 4,704 long positions and 14,382 short positions. The "Non-commercial" group remains bearish, indicating further declines. Long positions total 152,000, while short positions stand at 218,000.

Large players have been selling euros for 14 consecutive weeks, reinforcing the bearish trend. Although bullish weeks occasionally occur, they are exceptions. The key driver—anticipation of Federal Reserve monetary easing—has played out, leaving no immediate reasons for a dollar sell-off. Long-term bearish trends are expected to persist for EUR/USD.

News Calendar for the US and Eurozone:

• Eurozone: German Unemployment Rate (08:55 UTC).
• Eurozone: Change in Unemployment (08:55 UTC).
• US: ISM Manufacturing PMI (15:00 UTC).

On January 3, three economic events were listed, with the ISM Manufacturing PMI being the most significant. The news impact on market sentiment could be moderate.

Forecast and Trading Tips for EUR/USD:

• Sales: Were possible after a 4-hour chart rebound from 1.0436, targeting 1.0336–1.0346 and 1.0255 (all targets met). New shorts are viable upon a close below 1.0255 (targeting 1.0154) or a bounce from 1.0336–1.0346.
• Purchases: Could have been considered on a rebound from 1.0255, targeting 1.0336–1.0346. However, in a bearish trend, purchases remain secondary.

Fibonacci Levels:

• Hourly Chart: Built from 1.0336 to 1.0630.
• 4-Hour Chart: Built from 1.0603 to 1.1214.