04.08.202507:17 Forex Analysis & Reviews: Euro Currency – Weekly Preview

Based solely on wave markings (as with the British pound), I would expect only growth from the European currency. The last five-wave upward structure looks almost textbook-perfect. The most recent three-wave corrective structure also appears textbook-perfect. For demand for the U.S. dollar to continue rising, a strong American news backdrop is necessary. However, last Friday showed the world how the U.S. economy responds to Donald Trump's trade war. The economy is growing at a fast pace, but what is driving it? A decline in imports and increased budget revenue from tariffs, which are paid by American consumers themselves? Meanwhile, inflation is rising, unemployment is climbing, and payrolls have shown minimum values for three consecutive months. Simply put, the economy isn't growing in the real sense of the word—only monetary inflows to the budget are increasing.

The news background in the Eurozone this week will not be particularly strong or significant. Its impact on the instrument's movement will be minimal. Much more important will be any news about new tariffs or sanctions from Trump. As I already mentioned, market participants currently understand what price Americans will have to pay for the trade war. Therefore, to me, a decline in the U.S. dollar appears to be the most logical scenario.

That said, I would still highlight reports such as Eurozone retail sales for June and Germany's industrial production for June. They're not the most interesting reports. In my view, beyond Trump's tariff-related news, expectations regarding the Federal Reserve's interest rate for the rest of the year carry immense importance. Last week, these expectations became more dovish, and now two or even three rounds of monetary policy easing are fully justified. In my opinion, only the most important U.S. reports and the Bank of England's meeting this week will truly matter.

Wave Picture for EUR/USD:

Based on the EUR/USD analysis, I conclude that the pair continues forming an upward trend segment. The wave structure remains entirely dependent on the news background related to Trump's decisions and U.S. foreign policy. The targets for this trend segment may extend up to the 1.25 level. Therefore, I continue to consider buying opportunities with targets around 1.1875, which corresponds to 161.8% Fibonacci, and higher. Presumably, wave 4 has been completed. Therefore, this is a good time to buy.

Wave Picture for GBP/USD:

The wave picture for GBP/USD remains unchanged. We are dealing with an upward, impulsive segment of the trend. Under Trump, markets could still face many shocks and reversals, which may significantly affect the wave pattern, but at this point, the working scenario remains intact. The targets for the upward segment of the trend are now located around 1.4017. Currently, I assume that the construction of the corrective wave 4 has been completed. Therefore, I expect the upward wave sequence to resume, and I am considering long positions.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often prone to changes.
2. If you're unsure about what's happening in the market, it's better not to enter.
3. Absolute certainty in market direction does not and cannot exist. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.