The EUR/USD pair continued to decline within a horizontal channel on Friday. After reaching the area near the lower boundary of the channel, the pair reversed in favor of the European currency and began rising toward the upper boundary. The 127.2% retracement level at 1.1220 is located within the channel and does not provide reliable trading signals.

The wave structure on the hourly chart remains bearish. The latest completed downward wave broke below the previous low, while the latest upward wave failed to break above the previous high. Following the September FOMC meeting, traders expect at least one more monetary policy tightening before the end of the year and another one next year. This factor continues to support the U.S. dollar, while traders consider other factors secondary.

The news background supported the bears on Friday, as U.S. labor market and unemployment data came in significantly better than expected. Nonfarm Payrolls exceeded traders' expectations by approximately three times, while the unemployment rate unexpectedly declined to 4.1%. Thus, the dollar received market support but failed to break below its recent lows or resume its bearish trend. The labor market and unemployment data should be assessed in the context of FOMC monetary policy, as virtually all economic data are currently interpreted through this lens. For example, the U.S. inflation report will be released tomorrow and is also important for assessing potential future changes in the Fed's interest rate. At the same time, the market is already confident that monetary policy will be tightened at the December meeting, even without the labor market and inflation reports. Therefore, in the current month, these reports can only provide temporary support for the U.S. dollar or fail to do so. The Fed, ECB, and Bank of England are prepared to tighten monetary policy at every other meeting if necessary. The FOMC took a pause in October, which means it will raise interest rates in December regardless of the inflation data. The December policy tightening has, in my view, already been priced in. Therefore, even high inflation in October should not trigger significant selling pressure on the euro.

On the 4-hour chart, the pair reversed in favor of the U.S. dollar following the formation of a second bearish divergence on the CCI indicator. Consolidation below the 127.2% Fibonacci level at 1.1221 would suggest further declines toward the 161.8% retracement level at 1.1088. However, the sideways movement on the hourly chart is currently more important than the retracement levels. No new developing divergences are visible today.

Commitments of Traders (COT) Report

During the latest reporting week, professional traders closed 1,263 Long positions and opened 12,634 Short positions. The total number of Long positions held by speculators currently stands at 229,000, while the number of Short positions amounts to 387,000. The bears remain in control, and the European currency continues to be sold more frequently than it is bought. This is explained by the complicated geopolitical situation in the Middle East and the Fed's willingness to continue tightening monetary policy. The market believes that the Fed will continue raising interest rates for as long as necessary.

Overall, over the long term, major market participants continue to show considerable interest in the euro. Clearly, various global events, which have been particularly numerous in recent years, affect investor sentiment and put pressure on risk-sensitive currencies. Furthermore, 2026 may set a record for the number of unforeseen events. Therefore, the European currency is waiting for a more favorable opportunity.

Economic Calendar for the United States and the European Union

• Germany – Trade Balance (07:00 UTC).

On November 9, the economic calendar contains only one event, which is unlikely to attract any interest. The economic news background is expected to have no impact on market sentiment on Monday.

EUR/USD Forecast and Trading Tips

Buying the pair is possible if it reverses on the hourly chart near either of the two most recent bearish swing lows, with targets at 1.1220 and 1.1270. Selling opportunities were available following a close below 1.1220, with a target of 1.1115.

The Fibonacci retracement levels are drawn from 1.1325 to 1.1712 on both the hourly and 4-hour charts.