On Monday, the EUR/USD pair reversed in favor of the euro and rose toward the 127.2% retracement level at 1.1220. The pair's rebound from this level favored the US dollar and triggered a decline toward the 1.1081–1.1086 support level, which may continue today. Consolidation above 1.1220 would suggest further gains for the euro. However, it is worth noting that this is not a strong level, and several false signals have previously formed around it.

The wave structure on the hourly chart remains bearish. The latest completed downward wave broke below the previous low, while the new upward wave has not yet broken above the previous high. Following the September FOMC meeting, traders expect at least one more monetary policy tightening measure before the end of the year and another one next year. This factor continues to provide substantial support for the US dollar, while traders regard other factors as secondary.

The news background on Monday once again favored the bears and the US dollar. The most important US manufacturing activity indicator, the ISM Manufacturing PMI, came in at 55.5 points in October, significantly exceeding forecasts. As a result, the latest bullish attempt lost momentum, just like all previous attempts. The market is not yet rushing to anticipate developments and prefers to wait for the results of the US congressional elections, the Bank of England meeting, the European inflation report, and US labor market data. Therefore, even today, significant price movements may be absent. It cannot be said that the euro has been declining over the past few weeks, but the chart nevertheless shows a downward bias. For the same reason, the pair cannot be described as moving sideways. The market has simply paused ahead of several important events. If market participants knew what to expect from the elections, inflation data, and labor market reports, more active trading would already be underway. However, the market remains uncertain and is waiting for further information.

On the 4-hour chart, the pair reversed in favor of the euro and returned to the 127.2% retracement level at 1.1221. A rebound from this level would favor the US dollar and a resumption of the decline toward the 161.8% retracement level at 1.1088, keeping the bears in control. Consolidation above 1.1221 would increase the likelihood of further gains toward the next Fibonacci level at 1.1325 (100.0%). The CCI indicator has formed a bearish divergence.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 4,225 Long positions and 13,595 Short positions. The total number of Long positions held by speculators currently stands at 231,000, while the number of Short positions amounts to 374,000. The bears maintain their advantage, and the euro continues to be sold more frequently than it is bought. This is attributed to the complicated geopolitical situation in the Middle East and Kevin Warsh's efforts to achieve lower inflation. The market believes that the Federal Reserve will continue raising interest rates for as long as necessary.

Overall, major market participants continue to show considerable interest in the euro over the long term. Events of various kinds around the world, which have been particularly frequent in recent years, undoubtedly affect investor sentiment and put pressure on risk-sensitive currencies. Moreover, 2026 could set a record for the number of unforeseen events. Therefore, the euro is waiting for a more favorable opportunity.

Economic Calendar for the United States and the European Union:

• US – JOLTS Job Openings (15:00 UTC).
• US – Congressional Elections.

On November 3, the economic calendar contains two entries, but the results of the congressional elections will probably become known on Wednesday night. The impact of economic news on market sentiment on Tuesday may be limited.

EUR/USD Forecast and Trading Tips:

Long positions in the pair may be considered today following an hourly close above 1.1220, with a target of 1.1325. Short positions may be considered following a rebound from 1.1220, with the 1.1081–1.1086 support level as the target. The rebound has effectively already occurred.

The Fibonacci retracement levels are drawn from 1.1325 to 1.1712 on both the hourly and 4-hour charts.