On Monday, the EUR/USD pair continued its upward movement, ending the day near last week's highs. In my view, the market is currently in a state of chaos and panic, as there is an overload of news, many of which cannot be definitively categorized as positive for either the euro or the dollar. As a result, we are witnessing growth, but a rejection from the resistance zone at 1.0526–1.0529 could once again favor the US dollar and trigger a decline within the horizontal range on the 4-hour chart. I would like to remind you that important economic data is expected from the US this week, and Donald Trump continues to announce impactful decisions daily.

The wave structure on the hourly chart exhibits all the characteristics of a sideways market. The last completed upward wave broke the previous high, while the latest downward wave broke the previous low. This suggests a complex horizontal movement, which is more clearly visible on the 4-hour chart.

Monday's market sentiment was overwhelming. Before traders even had time to react, the euro surged by 50 points. This was followed by manufacturing PMIs from Germany and the EU, which came in slightly better than preliminary estimates. Later, the EU inflation report for February showed figures slightly above expectations. However, I believe this minor deviation was not enough to justify such a sharp rise in the euro. Inflation slowed less than expected, but this will not influence the ECB's decision on Thursday regarding monetary policy easing.

In my opinion, this situation started with the confrontation between Volodymyr Zelensky and Donald Trump on Friday at the White House. Over the weekend, it became known that a natural resources agreement between the US and Ukraine was not signed, leading to a deterioration in relations between the two countries. Additionally, it was reported that Trump raised tariffs on Chinese imports to 20% while simultaneously considering reducing tariffs for Mexico and Canada, which had not yet even taken effect. The market is reacting erratically to these developments, making the euro's rise seem unsustainable.

On the 4-hour chart, the pair has once again returned to the upper boundary of the horizontal range. A rejection from this level could once again favor the US dollar, pushing the pair down toward 1.0332 and 1.0225. No impending divergences are observed in any indicators today. A breakout above the range could signal stronger euro appreciation.

Commitments of Traders (COT) Report

During the last reporting week, professional traders opened 12,379 long positions and closed 13,616 short positions. The Non-commercial group maintains a bearish bias, but sentiment has been softening lately. The total number of long positions held by speculators is now 182,000, while short positions stand at 208,000.

For twenty consecutive weeks, major players have been reducing their euro positions, indicating a bearish trend without any exceptions. Occasionally, bulls dominate for short periods, but this remains an exception rather than a rule. The divergence in monetary policy between the ECB and the Fed continues to expand the interest rate differential, which remains favorable for the US dollar. The bearish advantage is diminishing, but it is still too early to call for a reversal of the bearish trend. The number of long positions has been rising for four consecutive weeks.

Economic Calendar for the US and Eurozone

The only notable event on March 4 is the Eurozone unemployment rate. However, this release is not considered highly significant for traders, meaning that news-driven market sentiment on Tuesday could be weak or nonexistent.

EUR/USD Forecast and Trading Recommendations

Selling the pair was possible upon rejection from the 1.0526–1.0529 resistance zone on the hourly chart, with a target of 1.0458, which has already been met. New short positions can be considered if another rejection occurs in the 1.0526–1.0529 zone. I would not recommend buying at this stage, as the pair remains within a range and is currently near its upper boundary.

The Fibonacci retracement levels are drawn from 1.0213 to 1.0529 on the hourly chart and from 1.0603 to 1.1214 on the 4-hour chart.