On Friday, EUR/USD returned to the 161.8% Fibonacci retracement level located at 1.0574. This time, the price failed to rebound from this level but it also failed to close above it. On Monday, the euro/dollar pair closed the session just above this mark although I don't think that 15 pips are enough to say that there was a firm close above the level. Therefore, the price may still rebound from the level of 1.0574 and move downwards to the 200.0% Fibonacci retracement level at 1.0430. However, the pair may again fail to reach it. A new week brought the same problems, and the start of the weekly session looks very sluggish. The information background is almost empty although markets are waiting for some important reports in the middle and at the end of the week. In the meantime, let's try to figure out whether the euro has any upside potential in the coming days. Most traders and analysts are fully focused on what the Fed and the ECB are going to do. The current situation is unfavorable for the euro. The US Federal Reserve raised the rate at its last meeting by 0.75%. The regulator is likely to do the same at its next meeting in July.

Therefore, the hawkish stance of the Fed officials is obvious. The US dollar gains support from such a policy and limits the upside potential of the euro. At the same time, the ECB is expected to raise the rate for the first time next month. I think that this will be an increase of no more than 0.25%. If this scenario is true, then the chance that the euro will strengthen next month is very slim. The European currency may show slight growth ahead of the ECB meeting. So, it is still possible that the pair may rise but this movement is likely to be very moderate. If the quote closes firmly above the level of 1.0574, the pair may then head for the 1.0705 target.

On the 4-hour time frame, the euro/dollar pair resumed its movement towards the upper line of the descending trend channel, which characterizes the market sentiment as bearish. I call this trajectory "a movement" rather than "growth" since it is too weak to be called otherwise. Consolidation of the price above the trend channel will significantly increase the chances for growth to the 76.4% fibo level located at 1.1041.

Commitments of Traders (COT):

Last week, traders closed 11,432 Long contracts and 1,845 Short contracts. This indicates that the bearish sentiment has intensified. The total number of opened Long contracts stands at 195,000, while the number of Short contracts is 211,000. Although the difference is minor, it still shows that bulls are losing ground. In recent months, the non-commercial category of traders was mostly bullish on the pair, which did not support the euro in any way. The possibility of a rise in the euro was getting higher in recent weeks. However, the latest COT reports showed that the European currency may soon face a new sell-off. There is nothing that the Fed or the ECB can do to support the euro.

Economic calendar for US and EU:

US – Durable goods orders (12-30 UTC).US – Pending home sales (14-00 UTC).EU – ECB President Christine Lagarde speaks (18-30 UTC).

On June 27, there are several important events both in Europe and the US. I think that the statement by Christine Lagarde will draw the most attention. Today, the influence of the information background will be weak.

EUR/USD forecast and trading tips:

I would recommend selling the pair on H1 after a rebound from the level of 161.8% - 1.0574 with the next target at 1.0430. It is possible to earn around 60-70 pips on such rebounds every day. You can consider buying the euro when the price settles firmly above the trend channel on H4 with the target at 1.1041.