On Wednesday, the EUR/USD pair rebounded from the 200.0% corrective level at 1.2031, reversed in favor of the U.S. dollar, and fell by 120 points. This was followed by a close above the 161.8% Fibonacci level at 1.1945, which allows for expectations of a return to the 1.2031 level. A new consolidation below 1.1945 would once again work in favor of the U.S. dollar and lead to a moderate decline toward the 127.2% corrective level at 1.1867.

The wave picture on the hourly chart remains simple. The most recently completed downward wave did not break the low of the previous wave, while the latest upward wave broke the previous high. Thus, the trend remains "bullish." Bulls continue a new offensive that might not have occurred without Donald Trump. Trump has heated up the global situation to the limit, and markets continue to react by fleeing from the risky U.S. dollar amid uncertain economic prospects.

On Wednesday evening, the FOMC announced the results of its first meeting of 2026. As most traders expected, monetary policy parameters were left unchanged, so market attention immediately shifted to Jerome Powell's speech. The Fed Chair stated that the U.S. economy is showing stable growth rates and that the labor market is gradually recovering. Inflation remains elevated, and new tariffs imposed by Trump (as well as retaliatory tariffs against the U.S.) could trigger growth in the consumer price index.

The Fed Chair also said that the central bank must remain independent from political influence. He urged the next chair to preserve the Fed's independence from the White House. Previously, Powell openly accused the Department of Justice of political pressure. I would like to remind that a legal investigation against Powell is still ongoing, related to alleged false testimony before Congress concerning the reconstruction of Fed buildings. According to Trump—who has been trying for over a year to dismiss Powell and some of his colleagues—Powell spent too much money on renovations and failed to report this to Congress. It should also be added that Powell's term as FOMC Chair expires in May. Despite aggressive pressure from Trump, only two FOMC members voted for an interest rate cut last night.

On the 4-hour chart, the pair rebounded from the resistance level of 1.2041–1.2066 and fell to the 100.0% corrective level at 1.1918. A consolidation below this level would favor a continuation of the decline toward the next corrective level at 76.4% – 1.1813. A rebound from 1.1918 would allow traders to expect a return to the 1.2041–1.2066 level. No emerging divergences are observed on any indicators today.

Commitments of Traders (COT) Report:

During the last reporting week, professional traders closed 8,357 long positions and opened 12,604 short positions. The sentiment of the "Non-commercial" group remains bullish thanks to Donald Trump and his policies, and it continues to strengthen over time. The total number of long positions held by speculators now stands at 275,000, while short positions total 163,000. This represents nearly a twofold advantage for the bulls.

For thirty-three consecutive weeks, large players were reducing short positions and increasing long ones. Then the "shutdown" began, and now we are seeing the same picture again: professional traders continue to build long positions. Donald Trump's policies remain the most significant factor for traders, as they create numerous problems that will have long-term and structural consequences for the United States—for example, deterioration in the labor market. Traders fear a loss of Fed independence in 2026 and Donald Trump's geopolitical ambitions.

News Calendar for the U.S. and the Eurozone:

U.S. – Change in Initial Jobless Claims (13:30 UTC).

On January 29, the economic calendar contains only one minor entry. The impact of the news background on market sentiment on Thursday will be absent.

EUR/USD Forecast and Trader Advice:

Selling the pair is possible today if there is a rebound on the hourly chart from the 1.2031 level, with targets at 1.1945 and 1.1867, or in the event of a close below 1.1945. Buying opportunities were available on a rebound from the 1.1686 level on the hourly chart with targets at 1.1731, 1.1802, 1.1945, and 1.2031. All targets have been reached. New buying opportunities may arise on a close above 1.2031 with a target at 1.2172.

Fibonacci grids are constructed from 1.1805–1.1578 on the hourly chart and from 1.1918–1.1471 on the 4-hour chart.