On Friday, EUR/USD reversed in favor of the U.S. dollar and declined toward the 1.1081–1.1086 support level. Bears failed to reach this zone, allowing bulls to regain the initiative and attempt to push the euro at least toward the 127.2% retracement level at 1.1220. A rebound from this level would once again favor the U.S. dollar. Consolidation above 1.1220 would increase the likelihood of further growth toward the next Fibonacci level at 100.0% (1.1325).

The wave structure on the hourly chart remains bearish. The latest completed downward wave broke the previous low, while the new upward wave has not yet broken the previous high. Following the September FOMC meeting, traders expect at least one more monetary policy tightening this year and another one next year. This factor continues to provide strong support for the U.S. dollar, while other factors are regarded by traders as secondary.

The fundamental background on Friday supported bears, although all the day's reports could easily have been interpreted as favorable for the euro. However, the market was most disappointed by the slowdown in German inflation and largely overlooked the reports on economic growth and unemployment. The German inflation report did not cause a major decline in the euro, but it set back its recent progress by several days. Bullish traders are attempting to reverse the bearish trend, but have yet to achieve any results.

There will be plenty of important events this week, and it is impossible to predict the market's reaction in advance. The U.S. congressional elections will take place tomorrow, the Eurozone inflation report will be released on Wednesday, and the U.S. labor market and unemployment reports are scheduled for Friday. In addition, Donald Trump could resume military action against Iran at any time, an event that would hardly go unnoticed by the market. Consequently, either bulls or bears could launch a significant advance on any given day. In the current situation, the euro's weakness is its main advantage.

On the 4-hour chart, EUR/USD reversed in favor of the euro and returned to the 127.2% retracement level at 1.1221. A rebound from this level would favor the U.S. dollar and a resumption of the decline toward the 161.8% Fibonacci retracement level at 1.1088, keeping bears in control. Consolidation above 1.1221 would increase the likelihood of further growth toward the next Fibonacci level at 100.0% (1.1325). A bearish divergence has formed on the CCI indicator.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 4,225 Long positions and 13,595 Short positions. The total number of Long positions held by speculators currently stands at 231,000, while the number of Short positions amounts to 374,000. Bears maintain their advantage, and the euro continues to be sold more frequently than it is bought. This is attributed to the challenging geopolitical situation in the Middle East and Kevin Warsh's intention to bring inflation down. The market believes that the Federal Reserve will continue raising interest rates for as long as necessary.

Overall, large market participants continue to show considerable interest in the euro over the long term. Undoubtedly, various global developments, which have been particularly numerous in recent years, influence investor sentiment and put pressure on risk-sensitive currencies. Furthermore, 2026 could set a record for the number of unexpected events. Therefore, the euro is waiting for a more favorable opportunity.

Economic Calendar for the United States and the European Union:

• Germany – Retail Sales (07:00 UTC).
• Germany – Manufacturing Purchasing Managers' Index (08:55 UTC).
• European Union – Manufacturing Purchasing Managers' Index (09:00 UTC).
• United States – ISM Manufacturing Purchasing Managers' Index (15:00 UTC).

The economic calendar for November 2 contains four events, with the ISM Manufacturing PMI being the most noteworthy. Economic data is expected to influence market sentiment during the second half of Monday's trading session.

EUR/USD Forecast and Trading Recommendations:

Long positions may be considered today following an hourly close above 1.1220, with a target of 1.1325. Short positions may be considered following a rebound from 1.1220, with the 1.1081–1.1086 support level as the target.

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