The wave structure on the hourly chart is unclear, but recent patterns indicate a bullish trend. The last completed downward wave did not break the previous low, while the latest upward wave exceeded the prior peak. This suggests either a continuation of the bullish trend or a complex horizontal movement, which is more evident on the four-hour chart.

The fundamental backdrop on Monday was weak, despite a few releases in the Eurozone. However, the market was primarily focused on the German elections. Initially, bulls drove the pair higher on expectations of political stability, but in the second half of the day, their momentum faded as traders realized that Germany's economic fundamentals remained unchanged.

Today, data confirmed that Germany's GDP contracted by 0.2% quarter-over-quarter and year-over-year, reinforcing concerns about economic stagnation. Additionally, Germany's Ifo Business Climate Index came in at 85.2, slightly below expectations. With no strong support for euro bulls, a bearish wave may be forming, as fundamentals still favor the U.S. dollar. The ECB's cautious stance continues to limit the euro's upside potential. With a lack of high-impact news today, market activity may remain subdued.

On the 4-hour chart, the pair has retraced to the 127.2% corrective level at 1.0436 and consolidated above it. However, the overall price movement in 2025 has been predominantly horizontal, indicating a sideways market. The ascending trend channel appears to be nominal, as the price does not strictly adhere to it. No emerging divergences are currently observed on any technical indicators.

Commitments of Traders (COT) Report

During the last reporting week, institutional traders opened 4,726 new long positions but closed 8,279 short positions. The "Non-commercial" group remains bearish, with 170,000 long positions compared to 221,000 short positions.

For 21 consecutive weeks, institutional players have been reducing euro exposure, confirming a bearish trend. Occasionally, bulls regain temporary dominance, but these are exceptions rather than a shift in market sentiment. The main driver behind dollar weakness—expectations of Fed rate cuts—has already been priced in, leaving little reason for further USD selling. While recent macroeconomic data from both the U.S. and Eurozone provided short-term bullish momentum, it is too early to call an end to the bearish trend.

Economic Calendar (February 25, 2025)

• Eurozone – Germany Q4 GDP (07:00 UTC)
• U.S. – Consumer Confidence Index (15:00 UTC)

Today's calendar features two minor economic releases. Germany's GDP report is a final estimate, meaning its market impact should be limited, as traders already factored in previous projections. The consumer confidence index from the U.S. may also have a muted effect on market sentiment.

EUR/USD Trading Plan

Sell opportunities arise from a rejection at 1.0533, targeting 1.0458. Buy opportunities could emerge from a rebound at 1.0458, with a target at 1.0533. Further selling is possible if EUR/USD closes below 1.0458 on the hourly chart, opening the way for 1.0435 and 1.0411.

Fibonacci retracement levels are drawn from 1.0533 to 1.0213 on the hourly chart and from 1.0603 to 1.1214 on the four-hour chart.