23.06.202500:12 Forex Analysis & Reviews: Euro: Preview of the Week

Few genuinely believe that economic news will overshadow other developments in the coming week. These "other developments" are of global significance. Over the weekend, the United States launched a strike on three key Iranian nuclear facilities, completely destroying them. Donald Trump stated that Iran must sign a "peace agreement" (i.e., a nuclear disarmament deal), or the U.S. will carry out even more devastating attacks. Trump also warned Tehran against retaliating against American assets, while Iranian authorities appealed to the UN and notified Washington of the legal basis for their own counterstrikes. As a result, we're in for a "hot" week with many events expected.

I usually divide news by country, but that likely makes little sense this time. For the past five months, the dynamics of both instruments I cover have depended solely on Trump—and indirectly on U.S. policy. This coming week, everything will hinge on the geopolitical conflict between Iran and Israel, with U.S. involvement. Market participants will certainly note economic news, but the most significant and interesting moves (which could even affect wave markings) will come from other causes. By Monday night, quotes may surge in either direction.

Nevertheless, in the European Union on Monday, we expect the release of services and manufacturing PMIs, along with a speech from Christine Lagarde. On Tuesday, there will be another speech from Lagarde. Wednesday brings nothing. On Thursday, yet another speech from Lagarde. Friday – nothing again. In essence, the European Central Bank President will be speaking all week, but this does not guarantee any new information regarding monetary policy. Remember that the ECB meeting took place just two weeks ago. Interest rates were cut for the eighth consecutive time by 25 basis points, and the main rate is now very close to the "neutral level." The ECB now plans to slow the pace of easing. We may still see one or two more rate cuts this year, which could mark the end of the entire cycle of abandoning hawkish policy.

Wave Structure for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues forming an upward trend segment. The wave pattern still completely depends on the news backdrop related to Trump's decisions and U.S. foreign policy. The targets of wave 3 could extend up to the 1.25 area. Therefore, I consider buying positions with initial targets around 1.1708, corresponding to the 127.2% Fibonacci level. A de-escalation of the trade war could reverse the upward trend, but currently, there are no signs of either a reversal or de-escalation.

Wave Structure for GBP/USD:

The wave pattern for GBP/USD remains unchanged. We are dealing with an upward, impulsive trend segment. With Trump, markets may still face many shocks and reversals that could seriously impact wave structures, but at the moment, the working scenario remains intact, and Trump continues to do everything possible to reduce demand for the dollar. The targets of the upward wave 3 are near 1.3708, corresponding to the 200.0% Fibonacci level from the presumed global wave 2. Therefore, I continue to consider buying positions, as the market shows no intention of reversing the trend.

My Core Analytical Principles:

1. Wave structures should be simple and clear. Complex structures are hard to trade and often change.
2. If you're uncertain about what's happening in the market, it's better to stay out.
3. Absolute certainty in price direction never exists. Don't forget to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.