empty
13.05.2025 06:35 PM
EUR/USD Analysis on May 13, 2025

This image is no longer relevant

The wave structure on the 4-hour chart for EUR/USD has transformed into a bullish pattern and remains such. There is little doubt that this shift was triggered exclusively by the new U.S. trade policy. Prior to February 28, when the sharp depreciation of the dollar began, the entire wave structure reflected a convincing downward trend, forming a corrective wave 2. However, weekly announcements from Donald Trump about the imposition of various tariffs took their toll. Demand for the U.S. dollar started to plummet, and the entire trend section originating on January 13 took on an impulsive upward form.

In fact, the market failed to build a convincing wave 2 within this new bullish trend. Only a minor pullback followed, which was smaller than the corrective waves within wave 1. Nevertheless, the dollar could continue to weaken unless Trump reverses his trade policy course. And Monday's events have shown that he might indeed do so.

The EUR/USD pair fell by 160 basis points on Monday, setting a record for dollar strength in recent months. Demand for the dollar surged sharply after news broke about a 115% reduction in tariffs between the U.S. and China—an outcome of consultations held in Geneva. The parties agreed not to destroy trade between the two nations and to begin at least 90 days of negotiations to reach a more stable agreement that addresses all outstanding issues.

It appears, however, that the questions mainly come from Washington—and seemingly from Trump himself. Negotiations will likely be focused on satisfying the current U.S. president. Trump, I believe, genuinely wants a trade deal because he understands that without China, the U.S. economy could suffer severely, and American consumers will not welcome a doubling in prices for Chinese goods (which have long been considered cheap). Thus, while Trump is interested in a deal, he continues to act as though he isn't.

Overall, the past month has seen a "tariff thaw," and this would not have been possible without Trump's willingness to negotiate. First, he introduced a 90-day grace period for all countries except China, then extended the same period to Beijing. This clearly shows Trump's desire to strike a deal on his own terms—to reboot the economy, demonstrate his presidential prowess, and perhaps inspire grand tributes akin to the Great Pyramid of Giza or the Taj Mahal.

This image is no longer relevant

Conclusion

Based on the analysis of EUR/USD, the pair continues to build out a bullish wave trend. In the near term, the wave structure will fully depend on the position and actions of the U.S. president. This should always be kept in mind. Wave 3 of the bullish segment has begun, and its targets may reach the 1.25 level. Hitting these targets will depend solely on Trump's policies. At this point, wave 2 within wave 3 appears to be nearing completion. Therefore, I am considering long positions with targets above 1.1572, which corresponds to the 423.6% Fibonacci extension. However, Trump could easily reverse the bullish trend with a single decision.

On the higher wave scale, the structure has also shifted to a bullish format. A long-term upward wave sequence is likely in store—but Trump's news flow could still turn everything upside down again.

My Core Principles of Wave Analysis:

  1. Simplicity and Clarity: Wave structures should be simple and easily interpretable. Complex formations are harder to trade and often lead to revisions.
  2. Avoid Uncertainty: If there's no confidence in what's happening in the market, it's better to stay out.
  3. Use Protective Orders: Absolute certainty in price direction is never possible. Always use Stop-Loss orders.
  4. Combine Tools: Wave analysis can and should be combined with other types of analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD Analysis on May 22, 2025

For the GBP/USD pair, the wave structure continues to suggest the development of a bullish impulsive trend. The wave pattern is nearly identical to that of EUR/USD. Until February

Chin Zhao 18:12 2025-05-22 UTC+2

EUR/USD Analysis on May 21, 2025

The wave pattern on the 4-hour chart for EUR/USD has transformed into a bullish structure and continues to remain so. I believe no one doubts that this transformation occurred solely

Chin Zhao 18:56 2025-05-21 UTC+2

GBP/USD Analysis on May 21, 2025

wave structure, largely driven by Donald Trump. The wave setup is nearly identical to that of EUR/USD. Until February 28, we observed the formation of a convincing corrective structure that

Chin Zhao 18:51 2025-05-21 UTC+2

GBP/USD Analysis on May 20, 2025

The wave pattern for GBP/USD continues to indicate the formation of a bullish impulsive wave structure, thanks to Donald Trump. The wave picture is almost identical to that

Chin Zhao 19:47 2025-05-20 UTC+2

EUR/USD Analysis on May 20, 2025

The wave structure on the 4-hour EUR/USD chart has transformed into a bullish one and continues to maintain that shape. I believe there is no doubt that this transformation occurred

Chin Zhao 19:40 2025-05-20 UTC+2

EUR/USD Analysis on May 19, 2025

The wave pattern on the 4-hour chart has transformed into a bullish structure and remains as such. I believe there is no doubt that this transformation occurred solely

Chin Zhao 18:26 2025-05-19 UTC+2

Weekly Forecast Using Simplified Wave Analysis for GBP/USD, AUD/USD, USD/CHF, EUR/JPY, EUR/GBP, and the US Dollar Index on May 19th

GBP/USD Analysis: Since April 8, GBP/USD has been moving upward on the price chart. From the lower boundary of the potential reversal zone, a counter-correction has been forming

Isabel Clark 11:43 2025-05-19 UTC+2

Weekly Forecast Using Simplified Wave Analysis for EUR/USD, USD/JPY, GBP/JPY, USD/CAD, NZD/USD, and Gold on May 19th

EUR/USD Analysis: Since February, the EUR/USD chart has been forming an upward wave. Over the past month and a half, a corrective segment (B) has been developing within this wave

Isabel Clark 11:40 2025-05-19 UTC+2

GBP/USD Analysis on May 16, 2025

The wave structure for the GBP/USD instrument continues to indicate the formation of a bullish impulsive wave sequence. "Thanks" to Donald Trump, the wave pattern closely mirrors that of EUR/USD

Chin Zhao 18:43 2025-05-16 UTC+2

EUR/USD Analysis on May 16, 2025

The wave structure on the 4-hour chart for the EUR/USD pair has transformed into an upward one and continues to hold this formation. I believe there is little doubt that

Chin Zhao 18:40 2025-05-16 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.