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21.04.2025 01:00 AM
Euro: Weekly Preview

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There were very few changes regarding the euro last week. We observed horizontal movement for most of the week, which naturally did not affect the current wave markup. I want to remind you that the wave structure and the instrument's movements are now entirely dependent on Donald Trump's will. Last week brought enough news from both Trump and the European Central Bank, as well as from economic data. However, there were no updates regarding the introduction of new tariffs, so the market deemed all other news irrelevant under current conditions. As a result, we didn't see any significant movement.

The situation is unlikely to change in the new week. Tariffs from Donald Trump will remain in focus, and if there are none, there might again be no notable market moves. Among economic events, I can point out the service and manufacturing PMIs for April, and that's essentially it. While last week included a European Central Bank meeting — a major event with an important decision — the new week, the market will have very little to latch onto besides the same old tariff stories. The business activity indices can certainly indicate the direction of economic development for the next quarter, but under Trump's tariff policy, it's already clear which way the EU economy is headed.

Undoubtedly, the market will stop reacting solely to new tariffs sooner or later — simply because Trump won't be able to impose or repeal them endlessly. However, at this point, I cannot say that this phase has ended. Consequently, we should prepare for the fact that the White House will continue to dictate dynamics in the currency market.

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Wave analysis of EUR/USD

Based on the conducted analysis of EUR/USD, I conclude that the instrument continues to build a new upward trend section. Donald Trump's actions have reversed the previous downward trend. Therefore, the wave pattern will soon entirely depend on the position and decisions of the US president. This must constantly be kept in mind. Judging from the wave structure alone, I previously expected a three-wave correction in wave 2. However, wave 2 has already ended and took a single-wave form. Thus, the formation of wave 3 of the upward trend section has begun. Its targets could extend up to the 1.2500 level, but achieving them will depend solely on Trump.

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Wave analysis of GBP/USD

The wave structure of GBP/USD has changed. We are now dealing with a bullish, impulsive trend segment. Unfortunately, under Donald Trump, the markets may experience numerous shocks and reversals that do not conform to wave patterns or technical analysis. The presumed wave 2 is now complete, as quotes have surpassed the peak of wave 1. Therefore, we can expect the formation of an ascending wave 3, with the next targets at 1.3345 and 1.3541—assuming that Trump's stance on trade policy doesn't make a 180-degree turn, for which there is no indication.

Core principles of my analysis:
  1. Wave structures should be simple and understandable. Complex patterns are difficult to trade and often prone to change.
  2. If you're unsure about what's happening in the market, it's better to stay out.
  3. There is never 100% certainty about market direction. Always use protective Stop Loss orders.
  4. Wave analysis can be combined with other forms of analysis and trading strategies.
Chin Zhao,
Especialista em análise na InstaForex
© 2007-2025
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