The EUR/USD pair continued its decline on Thursday after consolidating below the 76.4% Fibonacci level at 1.1416. Thus, the euro's decline may continue today toward the next retracement level of 100.0% at 1.1325. Consolidation above the 1.1416 level would favor the euro and some growth toward the 61.8% retracement level at 1.1473.

The wave structure on the hourly chart remains bearish. The latest completed upward wave failed to break the previous peak, while the latest downward wave broke the previous low and has continued forming for three weeks already. Traders expect at least one more FOMC monetary policy tightening by the end of the year and another one next year. This factor continues to provide very strong support for the U.S. currency.

The fundamental backdrop on Thursday once again allowed bullish traders to launch a counterattack this week. First, it became known that negotiations between Iran and the United States at the UN in New York had gone well. Donald Trump said so, adding that everything would soon be resolved and that Iran would not possess nuclear weapons. Second, Iran itself expressed its readiness to open the Strait of Hormuz if Washington fulfills a number of conditions. Clearly, there are many conditions, and the White House will not accept many of them under any circumstances. However, this is an opportunity for negotiations, a deal, and peace. Third, China and the United States agreed to extend the trade truce for another two months, until January 10, 2027. All three of these events, in one way or another, gave the bulls an opportunity to attack. A reduction in geopolitical tensions would lower demand for safe-haven assets, including the dollar, while a trade deal between China and the United States would ease trade tensions between the world's two largest economies. Thus, the safe-haven dollar continues to rise solely on the FOMC monetary policy factor. Hawkish expectations continue to increase, but the bears cannot attack indefinitely.

On the 4-hour chart, the pair consolidated below the 23.6% Fibonacci level at 1.1449. Thus, the euro's decline may continue toward the next retracement level of 0.0% at 1.1325. A rebound from the 1.1325 level would allow for a reversal in favor of the euro and some growth toward the 1.1449 Fibonacci level. A bullish divergence is developing in the CCI indicator, which could stop the bears' attacks.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 10,491 Long positions and closed 5,132 Short positions. Over the seven weeks in February and March, the bulls' overwhelming advantage disappeared because of the war in Iran, while over the past twenty-five weeks, the situation has become more balanced amid market hopes for an end to the conflict. The total number of Long positions held by speculators currently stands at 209,000, while the number of Short positions stands at 235,000. The bears remain in the lead, but their advantage is narrowing.

Overall, over the long term, large market participants continue to show greater interest in the euro. Clearly, events of various kinds around the world, which have been abundant in recent years, affect investor sentiment. In particular, the market is currently keeping a close eye on the situation in the Middle East, where the war alternately appears to end and then resumes. However, geopolitics no longer determines the dollar's fate on its own.

News Calendar for the United States and the European Union:

• Germany – GfK Consumer Confidence Index (06:00 UTC).
• United States – Change in Durable Goods Orders (12:30 UTC).
• United States – University of Michigan Consumer Sentiment Index (14:00 UTC).

On September 25, the economic calendar contains three entries, of which I can highlight only the report on durable goods orders. The economic backdrop may influence market sentiment in the second half of Friday's trading session.

EUR/USD Forecast and Trading Tips:

Buying the pair is possible today if the hourly chart closes above 1.1416, with targets at 1.1473 and 1.1519. Sell trades were possible after consolidation below 1.1473, with targets at 1.1416 and 1.1325. These trades can now be closed in profit. New sell trades are possible after a rebound from 1.1416.

The Fibonacci grids are drawn from 1.1325 to 1.1712 on the hourly chart and from 1.1849 to 1.1325 on the 4-hour chart.