The EUR/USD pair has been trading sideways for seven consecutive days. The news backdrop this week has indeed been weak in terms of economic data, but at the same time everyone understands that currency movements are driven by more than just macroeconomic reports. In my view, the likelihood of a U.S. military operation in Iran increased significantly this week. Yesterday, another round of negotiations between Tehran and Washington concluded without any results. As the media reported, the positions of the two powers differ as much as a car differs from a helicopter. Yet even this major geopolitical event failed to prompt traders to trade more actively.

Let me remind you that the price has entered the "bullish" imbalance zone 12 for the second time, offering hope for a second reaction and a resumption of the bullish trend. But what conclusion can be drawn from the past seven days, if the price has remained inside the imbalance the entire time, showing no intention either to form a buy signal or to invalidate the imbalance itself? Thus, EUR/USD remains in a suspended state. If the imbalance is ultimately invalidated, the bears will take the offensive for a while, but the broader bullish trend will remain intact. If a reaction from imbalance 12 occurs, the upward movement will resume, which, in my opinion, is the most logical scenario under the current circumstances.

The latest bullish imbalance 12 could have been invalidated many times already. Since no reaction to this pattern has followed, there have been no grounds to open new long positions. Overall, the option of liquidity being taken below the February 6 low remains, but even this scenario is currently highly ambiguous. Liquidity grabs typically occur sharply and quickly, yet we are observing a seven-day sideways range.

The chart structure continues to signal bullish dominance. The bullish trend remains in place. At present, the pair is close to postponing the bullish scenario for some time, but the invalidation of imbalance 12 has not yet occurred. In any case, there are no bearish patterns from which traders could open short positions. And, as already mentioned, the trend is bullish. Therefore, buying still appears more reasonable than selling.

The news backdrop on Friday was extremely weak—both in headline and in substance. Germany's unemployment rate in January stood at 6.3%, in line with expectations. The number of unemployed increased by 1,000 versus forecasts of +2,000. Inflation in Germany slowed to 1.9%, although traders had expected a slightly higher figure. However, as I've already noted, these reports—like all previous ones this week—did not attract traders' attention.

Bulls have had plenty of reasons for a renewed advance for the past six to seven months, and with each week their number is not decreasing. These include the dovish (in any case) outlook for monetary policy from the Federal Open Market Committee (FOMC), the overall policy of Donald Trump (which has not changed recently), the U.S.–China confrontation (where only a temporary truce has been reached), protests by American citizens against Trump under the "No Kings" banner, weakness in the labor market, the autumn government shutdown (which lasted a month and a half), the February shutdown, U.S. military aggression toward certain states, the criminal proceedings against Powell, the "Greenland confusion," and worsening relations with Canada and South Korea. Therefore, in my view, further growth of the pair would be entirely logical.

I still do not believe in a bearish trend. The information backdrop remains extremely difficult to interpret in favor of the dollar, and I do not attempt to do so. The blue line shows the price level below which the bullish trend can be considered complete. Bears would need to push the price down about 280 points to reach it, which still appears to be a very challenging task given the current news background and chart structure, where not a single bearish pattern is present. The nearest upside target for the euro was the bearish imbalance at 1.1976–1.2092 on the weekly chart, formed back in June 2021. This pattern has now been fully filled. Above that, two levels can be identified: 1.2348 and 1.2564. These levels represent two peaks on the monthly chart.

News calendar for the U.S. and the European Union:

• European Union – Change in German retail sales (07:00 UTC).
• United States – ISM Manufacturing PMI (15:00 UTC).

On March 2, the economic calendar contains two entries, of which only the ISM index is significant. The impact of the news backdrop on market sentiment on Monday may appear in the second half of the day.

EUR/USD Forecast and Trading Advice:

In my view, the pair remains in the formation stage of a bullish trend. Although the information backdrop continues to favor the bulls, the bears have regularly launched attacks in recent months. Nevertheless, I do not see realistic reasons for the start of a bearish trend.

From imbalances 1, 2, 4, 5, 3, 8, and 9, traders had opportunities to buy the euro. In all cases, we saw some degree of growth, and the bullish trend remains intact. In recent weeks, the movement has not been what one would like to see, but through a liquidity grab within imbalance 12, a bullish signal with renewed upward movement may still form.