The EUR/USD pair has been in decline for the twelfth consecutive day, although in reality this is not entirely accurate. Out of these 12 days, the decline lasted no more than four days; the rest of the time the pair was essentially motionless, with trading activity close to zero — as has been the case over the past five days. Let me remind you that price entered the "bullish" imbalance zone 12 for the second time, giving hope for a second reaction and a resumption of the bullish trend. However, what conclusion can be drawn from the past five days if price has remained within the imbalance the entire time, showing no desire either to form a buy signal or to invalidate the imbalance itself? Thus, EUR/USD remains in a suspended state. If the imbalance is ultimately invalidated, the bears may take the offensive for a while, but the bullish trend would still remain intact. If a reaction to imbalance 12 occurs, the growth process will resume — which, in my view, is the most logical scenario under the current circumstances.

The latest bullish imbalance 12 could have been invalidated many times already. Since no reaction to this pattern has followed, there have been no grounds for opening new long positions. Overall, there is still the option of liquidity being taken from the February 6 low, but even this scenario now looks highly ambiguous. Liquidity grabs typically occur sharply and quickly, whereas we are observing a five-day sideways range.

The chart picture continues to signal bullish dominance. The bullish trend remains intact. At present, the pair is close to temporarily setting aside the bullish scenario, yet imbalance 12 has still not been invalidated. In any case, there are currently no bearish patterns from which traders could open short positions. And, as already mentioned, the trend is bullish. Therefore, buying remains more reasonable than selling.

The news background on Wednesday was extremely weak. In Germany, the consumer confidence index came in below forecasts. Also in Germany, the final estimate of fourth-quarter GDP matched traders' expectations. In the eurozone, the final estimate of January inflation was published and also met forecasts. Thus, traders essentially had nothing to react to today.

The bulls have had plenty of reasons for a new offensive for the past six to seven months, and with each passing week those reasons are not diminishing. These include the dovish (in any case) outlook for FOMC monetary policy, Donald Trump's overall policy stance (which has not changed recently), the U.S.–China confrontation (where only a temporary truce has been reached), protests by the American public against Trump under the slogan "No kings," weakness in the labor market, the autumn shutdown (which lasted a month and a half), the February shutdown, U.S. military aggression toward certain countries, the criminal prosecution of Powell, the "Greenland confusion," and worsening relations with Canada and South Korea. Thus, further growth of the pair, in my opinion, would be entirely natural.

I still do not believe in a bearish trend. The news background remains extremely difficult to interpret in favor of the dollar, which is why I am not attempting to do so. The blue line indicates the price level below which the bullish trend could be considered complete. The bears would need to push the pair down about 280 pips to reach it — which still appears to be a very difficult task given the current news background and chart picture, where there is not a single bearish pattern. The nearest upside target for the euro was the bearish imbalance at 1.1976–1.2092 on the weekly chart, formed back in June 2021. This pattern has now been fully filled. Above that, two levels can be highlighted: 1.2348 and 1.2564 — these are two peaks on the monthly chart.

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

• Eurozone – Speech by ECB President Christine Lagarde (08:30 UTC).
• U.S. – Change in Initial Jobless Claims (13:30 UTC).

On February 26, the economic calendar contains only two minor entries. The impact of the news background on market sentiment on Thursday may be extremely weak or absent altogether.

EUR/USD Forecast and Trading Advice:

In my view, the pair remains in the process of forming a bullish trend. Despite the news background favoring the bulls, the bears have regularly launched attacks in recent months. However, I see no realistic reasons for the start of a bearish trend.

From imbalances 1, 2, 4, 5, 3, 8, and 9, traders had opportunities to buy the euro. In all cases, we observed a certain degree of growth, and the bullish trend remains intact. In recent weeks, we have not seen the kind of movement we would like, but through a liquidity grab within imbalance 12, a bullish signal may still form, followed by a renewed upward move.