On Wednesday, the EUR/USD pair completed a second consecutive rebound from the 23.6% corrective level at 1.1731, reversed in favor of the U.S. currency, and fell to the 38.2% Fibonacci level at 1.1686. A rebound in quotes today from the 1.1686 level would work in favor of the European currency and some growth toward the 1.1731 level. Consolidation of the pair below 1.1686 would increase the likelihood of a further decline toward the support level of 1.1645–1.1648.

The wave situation on the hourly chart remains simple. The last completed downward wave broke the low of the previous wave, and the new upward wave broke the previous peak. Thus, the trend has once again changed to "bullish." The bulls are launching a new offensive, which might not have happened without Donald Trump. Trump heated up the situation around Greenland to the limit, and the markets responded by fleeing from the risky U.S. currency with uncertain economic prospects.

On Wednesday, the U.S. dollar experienced some relief. However, it is still far too early to relax. The situation with Greenland has been resolved, but we do not know the details. During yesterday's economic forum in Davos, Donald Trump only stated that he had reached an agreement on the island with NATO Secretary General Mark Rutte that would be beneficial for both the U.S. and NATO countries. The U.S. president also announced that amid the easing of the contentious situation around Greenland, he is canceling his decision to introduce tariffs starting February 1. Against the backdrop of an improvement in the geopolitical situation in the Arctic, the U.S. dollar strengthened its position. I would like to remind that previously, when geopolitical tensions arose, the dollar strengthened, and in the opposite situation it weakened. However, times change, and everything changes. Now, when America itself is the main initiator of conflicts, the U.S. dollar is no longer considered a "safe haven" among traders and investors. Therefore, it falls when geopolitical tensions increase. By the end of the week, we are to learn what kind of agreement was reached between Rutte and Trump. The dollar may yet come under market pressure.

On the 4-hour chart, the pair reversed in favor of the European currency and consolidated above the 1.1649–1.1680 level. Thus, the growth process may continue toward the next Fibonacci level of 0.0% at 1.1829. A new close below the 1.1649–1.1680 level would work in favor of the U.S. dollar, but imagining dollar growth under current circumstances is quite difficult. No emerging divergences are observed today on any indicator.

Commitments of Traders (COT) Report:

During the latest reporting week, professional players closed 14,661 long positions and opened 15,495 short positions. The sentiment of the "Non-commercial" group remains "bullish" thanks to Donald Trump and his policies, and it continues to strengthen over time. The total number of long positions held by speculators now stands at 283,000, while short positions amount to 151,000. This represents an almost twofold advantage for the bulls.

For thirty-three consecutive weeks, large players were getting rid of short positions and building up long positions. Then the "shutdown" began, and now we see the same picture again: professional traders continue to increase long positions. Donald Trump's policies remain the most significant factor for traders, as they create many problems that will have a long-term and structural nature for America. For example, the deterioration of the labor market. Traders fear the loss of the Federal Reserve's independence in 2026 under pressure from Trump and amid the resignation of Jerome Powell.

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

• U.S. – GDP change in the third quarter (13:30 UTC)
• U.S. – Change in the number of initial jobless claims (13:30 UTC)
• U.S. – Core Personal Consumption Expenditures Price Index (15:00 UTC)
• U.S. – Personal income and spending (15:00 UTC)

On January 22, the economic calendar contains four events, one of which is of heightened interest. The influence of the news background on market sentiment on Thursday may be felt in the second half of the day.

EUR/USD Forecast and Trading Advice:

Selling the pair was possible after a rebound from the 1.1731 level on the hourly chart with targets at 1.1686 and 1.1648. The first target has been reached. Buying is possible in the event of a rebound today from the 1.1686 level on the hourly chart with targets at 1.1731 and 1.1802.

Fibonacci grids are drawn from 1.1492–1.1805 on the hourly chart and from 1.1066–1.1829 on the 4-hour chart.