On Wednesday, the EUR/USD pair reversed in favor of the US dollar and consolidated below the 50.0% corrective level at 1.1630. Thus, the downward movement may continue toward the next Fibonacci level of 61.8% at 1.1578. A rebound from the 1.1578 level or consolidation above the 1.1630 level would favor the euro and support a resumption of growth toward the 38.2% corrective level at 1.1682.

The wave structure on the hourly chart currently remains straightforward. The latest completed downward wave broke below the previous low, while the latest upward wave did not even come close to the previous peak. Therefore, the trend remains bearish. The temporary ceasefire between Iran and the United States supported the bulls for an entire month; however, this was followed by a collapse in hopes for a lasting peace. Bulls will only be able to launch a meaningful offensive if Iran and the United States sign an interim agreement and stop violating the terms of the ceasefire.

There were few notable events on Wednesday, but early Thursday morning reports emerged that Washington had once again carried out a missile strike on Iran's coastal infrastructure, while Tehran responded with a strike on a US military base. Thus, the ceasefire has once again found itself on the verge of collapse and total failure. Despite the fact that neither side has officially withdrawn from the negotiation process, almost no traders still believe in a deal, at least not in the near term.

Trump insists on complete nuclear disarmament, while Tehran is unwilling to abandon uranium enrichment and does not intend to agree to transferring its uranium stockpiles even to China. Therefore, agreements between the parties on all other issues carry little significance. The conflict in the Middle East is close to escalating with renewed force, while all discussions regarding a possible agreement or breakthrough in negotiations are nothing more than speculation. Real factors continue to indicate a complete divergence in the views of Tehran and Washington regarding peaceful coexistence.

On the 4-hour chart, the pair continues to trade between the 23.6% corrective level at 1.1569 and the 38.2% corrective level at 1.1667. However, the market is not rushing to open positions or draw conclusions, and at the moment I recommend focusing primarily on the hourly chart, as price movements have remained relatively weak in recent weeks. No emerging divergences are currently observed on any indicator.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 9,249 Long positions and 15,936 Short positions. Over seven weeks in February and March, the bulls' total advantage disappeared due to the war in Iran, while over the past eight weeks the situation has stabilized amid the suspension of military operations in the Middle East.

The total number of Long positions held by speculators currently stands at 233,000, while Short positions amount to 199,000. The gap is once again widening in favor of the euro.

Overall, in the long term, major market participants continue to show strong interest in the euro. Naturally, various global developments, which have been abundant in recent years, continue to influence investor sentiment. In particular, market attention remains focused on the Middle East, where the war has only been paused rather than ended. Therefore, in the near future, the euro and dollar exchange rates will depend not on Federal Reserve or ECB monetary policy, nor on economic data, but on developments in Iran.

News Calendar for the United States and the European Union:

• European Union – Speech by ECB President Christine Lagarde (07:20 UTC).
• US – Core Personal Consumption Expenditures Price Index (12:30 UTC).
• US – Durable Goods Orders Change (12:30 UTC).
• US – Personal Income and Spending (12:30 UTC).

The economic calendar for May 28 contains four entries, none of which I consider particularly important. The influence of the economic background on market sentiment on Thursday may remain weak during the second half of the day.

EUR/USD Forecast and Trading Tips:

I previously recommended selling the pair after a close below the 1.1630 level on the hourly chart, targeting 1.1578. The target was nearly reached. Buy positions may be considered after consolidation above the 1.1630 level, with targets at 1.1682 and 1.1745. Alternatively, buying opportunities may emerge after a rebound from the 1.1578 level, with targets at 1.1630 and 1.1682.

Fibonacci levels are constructed from 1.1409–1.1850 on the hourly chart and from 1.2081–1.1411 on the 4-hour chart.