On Friday, the EUR/USD pair made another reversal in favor of the euro and consolidated above the 50.0% Fibonacci retracement level at 1.1745. As a result, the upward movement may continue today toward the next Fibonacci level at 61.8% – 1.1824. A close below 1.1745 would favor the U.S. dollar and open the door for a decline toward the 38.2% retracement level at 1.1666.

The wave structure on the hourly chart remains relatively straightforward. The latest completed downward wave failed to break the previous low, while the new upward wave surpassed the previous peak. Therefore, the trend remains bullish, although highly unstable, as all recent waves have been approximately equal in size. The temporary ceasefire between Iran and the United States supported the bulls, but now, three weeks later, it can be said that geopolitical developments are moving toward the continuation of the conflict. As a result, bullish attacks may remain limited or stop altogether.

Friday's news background was impressive, though it impressed everyone except traders. We will discuss the Nonfarm Payrolls report, unemployment rate, and other U.S. statistics in the GBP/USD article. For now, I suggest focusing on the main geopolitical event of the new week — Donald Trump's rejection of Iran's proposal to end the war. Information about this development emerged overnight and immediately forced the bulls to retreat from the market — for the third or fourth time over the past week. The balance constantly shifts between hopes for a peaceful settlement and fears of renewed escalation, forcing traders to rapidly switch positions. Donald Trump stated today that the latest peace proposal submitted by Iran was rejected because it was "completely unacceptable." Reports indicate that Tehran spent 10 days preparing a new peace plan, but its proposal failed to satisfy the White House. According to various sources, the key points of Tehran's proposal included an immediate end to the war, guarantees against future conflict, lifting the blockade of Iranian ports, and removing sanctions against Iran. In simple terms, Tehran presented a list of what it wanted to gain from the agreement, while Trump expected his own demands to be met. Unsurprisingly, the U.S. president did not receive that. Therefore, the latest round of negotiations can be considered a complete failure. Whether the sides will continue negotiations remains unknown.

On the 4-hour chart, the pair reversed in favor of the U.S. dollar and began declining toward the 76.4% Fibonacci retracement level at 1.1617. A rebound from the 1.1778 level would once again allow expectations of further decline. In my opinion, the hourly chart is currently more informative due to the weakness of price movements. Bulls regained market control about a month ago but are now searching for new growth drivers. No developing divergences are currently observed on any indicators.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 383 Long positions and 3,893 Short positions. Over seven weeks in February and March, the bulls' overwhelming advantage disappeared, while the situation has somewhat stabilized over the past six weeks. The total number of Long positions held by speculators now stands at 217,000, compared to 185,000 Short positions. The gap is once again widening in favor of the euro.

Overall, in the long term, major players continue to show considerable interest in the euro. Naturally, various global events — which have been abundant in recent years — continue to influence investor sentiment. At the moment, the market's attention remains focused on the Middle East, where the war has only been paused, not ended. Therefore, in the near future, the euro and dollar exchange rates will depend less on Federal Reserve or ECB monetary policy and economic data, and more on developments in Iran.

Economic Calendar for the U.S. and the Eurozone:

• U.S. Existing Home Sales (14:00 UTC)

The economic calendar for May 11 contains only one event, which cannot be considered important. The impact of the news background on market sentiment on Monday may therefore remain extremely limited.

EUR/USD Forecast and Trading Tips:

Selling opportunities may arise today if the pair consolidates below the 1.1745 level on the hourly chart, targeting 1.1666. I previously recommended long positions following consolidation above 1.1745, targeting 1.1824. These trades can still be kept open today.

Fibonacci retracement grids are based on the ranges 1.2082–1.1410 on the hourly chart and 1.1474–1.2082 on the 4-hour chart.