On Wednesday, the EUR/USD pair consolidated below the support zone of 1.0336–1.0346 and continued its decline towards the 127.2% Fibonacci corrective level at 1.0255. A rebound from this level may favor the euro and lead to some growth towards the resistance zone of 1.0336–1.0346. The bearish trend in the euro remains intact.

The wave structure is clear. The last completed upward wave failed to break the previous peak, while the new downward wave is likely to break the previous low. Thus, the bearish trend continues with no signs of completion. To reverse this trend, the euro must rise confidently above 1.0460 and close above this level.

Wednesday's news was mixed. In Germany, retail sales fell by 0.6% month-on-month, while the market had expected a 0.5% increase. On the other hand, annual sales grew by 2.5% compared to the forecast of 1.9%, making the report neither fully negative nor supportive for bears. In the US, the ADP report showed an increase of 122,000 jobs in December, below the expected 140,000. Based on these two reports, there seemed to be no clear reason for the euro's troubles. Despite this, bears continued to dominate for most of the day.

Today, the market might experience a lull, with traders focusing on nearby levels for trading signals. For instance, a rebound from 1.0336 could signal new selling opportunities, while a rebound from 1.0255 might indicate potential buying. However, it is essential to remember that bulls currently have no significant counter to bears, as Wednesday's sell-off occurred even without strong macroeconomic data favoring the bears.

On the 4-hour chart, the pair experienced two rejections from the 127.2% Fibonacci level at 1.0436, followed by consolidation below 1.0332. This suggests the decline may continue toward the 161.8% Fibonacci level at 1.0225. The downward trend channel clearly reflects the bearish market sentiment, and significant growth in the euro is unlikely unless the pair closes above this channel. Currently, no divergences are forming.

Commitments of Traders (COT) Report

In the latest reporting week, speculators opened 6,800 long positions and 9,412 short positions. Sentiment in the Non-commercial category remains bearish and is strengthening, indicating further potential declines for the pair. The total number of long positions now stands at 159,000, compared to 228,000 short positions.

For fifteen consecutive weeks, major players have been reducing their positions in the euro, signaling an unwavering bearish trend. Although bulls occasionally dominate during specific weeks, these instances are exceptions. The previously anticipated driver for dollar weakness—expectations of looser monetary policy from the Federal Open Market Committee (FOMC)—has already been priced in, leaving little reason for widespread dollar selling. While such reasons may arise over time, the dollar's strength remains the more likely outcome for now. Long-term graphical analysis also points to a continued bearish trend for the EUR/USD pair.

Economic Calendar for the US and the Eurozone

• Eurozone: Change in German industrial production (07:00 UTC)
• Eurozone: Change in retail sales (10:00 UTC)

On January 9, the economic calendar features only two events, neither of which is particularly significant. Therefore, the news background is expected to have a minimal impact on market sentiment.

Forecast for EUR/USD and Trading Recommendations

• Sales could have been initiated after a rejection from the 1.0405–1.0420 zone on the hourly chart, targeting 1.0336–1.0346 and 1.0255. The first target has been achieved, and selling positions can still be held.
• Purchases are possible after a rebound from 1.0255 on the hourly chart, targeting the 1.0336–1.0346 zone.

Fibonacci grids are drawn between 1.0336–1.0630 on the hourly chart and 1.0603–1.1214 on the 4-hour chart.