On Friday, the EUR/USD pair continued its upward movement and, on the third attempt, consolidated above the 76.4% Fibonacci correction level – 1.1695. Thus, growth may continue on Monday toward the next correction level of 100.0% – 1.1789. A consolidation below 1.1695 would favor the U.S. dollar and a decline toward the support zone of 1.1637–1.1645. The sideways trend remains in place.

The wave situation on the hourly chart remains simple and clear. The last completed upward wave broke the previous peaks, while the last downward wave broke the prior low only by a few points. This means that the trend may once again shift to "bullish," though the sideways movement may also persist. The latest labor market data and shifting expectations for Fed monetary policy are supporting the bulls.

On Friday, there was plenty of economic news both in Europe and the U.S. First, I would note Germany's Consumer Price Index. In August, prices rose 2.2% y/y, slightly above traders' expectations. I cannot draw any conclusions from this report that would indicate changes in the ECB's monetary policy stance. Inflation rose a bit more than expected, but it is still close to 2%. Nobody expected prices to rise exactly 2% every month as the ECB desires. Small fluctuations are acceptable. Germany's unemployment rate stood at 6.3%, unchanged from the previous month. Retail sales fell 1.5% in July, far worse than expected. The retail and inflation reports contradicted each other, so traders did not settle on a strategy for the day's first half. Today, ECB President Christine Lagarde will speak, and she may hint at what decision the regulator will make at the next meeting. Most likely, it will be a pause.

On the 4-hour chart, the pair made a new reversal in favor of the euro and consolidated above 1.1680. This level has been frequently crossed lately, so I do not recommend focusing on it. The hourly chart provides a much clearer and more informative picture, with more levels. No emerging divergences are seen on any indicators today. The 4-hour chart also clearly shows the sideways trend of recent weeks.

Commitments of Traders (COT) Report:

During the last reporting week, professional traders opened 5,667 long positions and 1,373 short positions. Sentiment among the "Non-commercial" group remains "bullish" thanks to Donald Trump and has been strengthening over time. The total number of long positions held by speculators now stands at 258,000, compared with 135,000 short positions – nearly a twofold gap. Also, note the number of green cells in the table above, indicating strong increases in euro positions. In most cases, interest in the euro continues to rise, while interest in the dollar declines.

For 29 consecutive weeks, large traders have been reducing short positions and increasing longs. Trump's policies remain the most significant factor for traders, as they could cause long-term structural problems for America. Despite several important trade deals being signed, some key economic indicators continue to show declines.

News Calendar for the U.S. and Eurozone:

• Eurozone – Unemployment Rate (09:00 UTC).
• Eurozone – ECB President Christine Lagarde's Speech (17:30 UTC).

On September 1, the economic calendar contains two entries, one of which can be considered important. The news background's influence on market sentiment on Monday will be minimal.

EUR/USD Forecast and Trader Advice:

Selling the pair was possible after a rebound from 1.1695 on the hourly chart, with targets at 1.1637–1.1645 and 1.1590. These targets were not reached. No buy signals were formed on Friday either. Today, buying is possible if the pair closes above 1.1695 with a target at 1.1789, while selling is possible if the pair closes below 1.1695 with targets at 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.