On Wednesday, EUR/USD made another reversal inside the horizontal channel in favor of the euro and consolidated above the 1.1637–1.1645 zone. A rebound from this zone today will work in favor of the euro and a renewed rise toward the 76.4% Fibonacci level – 1.1695. A consolidation below the 1.1637–1.1645 zone would point to a resumption of the decline toward the 50.0% retracement level – 1.1590.

The wave structure on the hourly chart remains simple and clear. The last completed upward wave did not break the previous highs, while the last downward wave only slightly broke the previous low. Thus, the trend may once again shift to "bullish," but the likelihood of continued sideways movement remains high. The latest labor market data and the changing outlook for Fed monetary policy support the bulls.

On Tuesday, the news background during the day was rather weak. The most important release was the U.S. JOLTS job openings report. This report is part of the broader U.S. labor market data "package." Recall that the market pays the most attention to unemployment reports and NonFarm Payrolls. Therefore, traders will not base their view of the labor market on ADP, JOLTS, or jobless claims alone. This week we have only seen two significant reports so far – euro area inflation (which practically ruled out near-term ECB easing) and the U.S. ISM manufacturing PMI (which came in weaker than expected). Thus, the bulls already had two opportunities to advance but chose to wait for the most important data of the week. Also note that Christine Lagarde delivered two speeches on Monday and Wednesday, but no significant monetary policy information was provided. There has also been little news from Donald Trump this week.

On the 4-hour chart, the pair made another reversal in favor of the euro and consolidated above the 1.1680 level. This level has been crossed frequently in recent days, so I do not advise paying much attention to it. A sideways channel is clearly visible, within which traders have been stuck for several weeks. Thus, consolidation continues. The CCI indicator has formed a bullish divergence, signaling possible growth in the near term – but still within the horizontal range. A consolidation above or below this channel will allow traders to count on a resumption of trend movement.

Commitments of Traders (COT) report:

During the last reporting week, professional players opened 5,667 long positions and 1,373 short positions. The sentiment of the "Non-commercial" category remains bullish, supported by Donald Trump's policies, and is strengthening over time. The total number of long positions held by speculators is now 258,000, compared to 135,000 shorts. The gap is nearly twofold. Also note the number of green cells in the table above, reflecting strong accumulation of euro positions. In most cases, interest in the euro continues to grow while interest in the dollar declines.

For twenty-nine consecutive weeks, large players have been reducing shorts and increasing longs. Trump's policies remain the key factor for traders, as they may create many long-term structural problems for the U.S. Despite the signing of several important trade agreements, some key economic indicators are showing declines.

News calendar for the U.S. and the euro area:

• Euro area – Retail sales change (09:00 UTC).
• U.S. – ADP Employment Change (12:15 UTC).
• U.S. – Initial Jobless Claims (12:30 UTC).
• U.S. – ISM Services PMI (14:00 UTC).

On September 4, the economic calendar contains four entries, at least two of which – ADP and ISM – should be considered important. The news background may influence market sentiment both in the morning and during the day.

EUR/USD forecast and trader tips: Selling the pair was possible upon an hourly close below 1.1695 with a target at 1.1637–1.1645. The target was reached. Buying was possible yesterday on a close above the 1.1637–1.1645 zone with a target at 1.1695. Today, such positions can be kept open if the pair rebounds from 1.1637–1.1645.

Fibonacci grids are built from 1.1789–1.1392 on the hourly chart and from 1.1214–1.0179 on the 4-hour chart.