01.09.202500:46 Forex Analysis & Reviews: Euro Currency. Week Preview

A new week begins, and I'll be quite disappointed if the sideways movement continues. Despite the clear interpretation of the current wave pattern, it could become more complicated—especially in the part relating to the internal subwaves. Let me remind you that over the past two weeks, there has certainly been news flow, but the market found little value in it. Important events did occur, but it seems participants decided to digest them later, in combination with other data—namely, US labor market reports or American inflation data.

The point is, further movement in the EUR/USD tool now largely depends on these two reports, as well as on the Federal Reserve's September 16–17 meeting, at which these data will play a key role. As a result, close attention should be paid to US data, with the most important releases due Friday. Still, the market won't be bored in the meantime.

In the Eurozone, there will be two speeches by Christine Lagarde, as well as the release of August's inflation report—undoubtedly the week's key events, not to be missed. While any major statements from Lagarde remain uncertain, the inflation report is likely to put dollar buyers on edge. In recent months, the Consumer Price Index has ceased to influence European Central Bank monetary policy, as the ECB has brought rates to "neutral" and inflation to its target. Thus, the goals of price stability have been achieved, and so far, there are no signs of renewed inflation acceleration in the EU.

Therefore, these events—the speeches by the ECB President and the inflation update—could turn out to be non-events. But if Eurozone inflation accelerates in August, the market is sure to react. And more likely than not, that reaction won't please the US dollar. Inflation growth would mean that a new round of monetary policy easing is unlikely in 2025. The market is already considering this scenario, but inflation growth is always bad for the economy and good for the euro.

EUR/USD Wave Picture:

Based on my EUR/USD analysis, I conclude that the instrument continues to form a bullish trend segment. The wave pattern remains entirely dependent on news flow linked to Donald Trump's decisions and US foreign policy. The trend segment's targets may extend all the way to the 1.25 level. Therefore, I continue to consider buying with targets around 1.1875 (which corresponds to 161.8% on Fibonacci) and above. I assume wave 4 construction is complete. Accordingly, now remains a good time for buying.

GBP/USD Wave Picture:

The wave pattern in GBP/USD remains unchanged. We are dealing with a bullish, impulsive segment of the trend. With Donald Trump, markets could face many more shocks and reversals that might seriously affect the wave picture, but for now, the main scenario remains intact. The bullish trend segment now targets the 1.4017 area. At present, I believe the corrective wave 4 is complete. Wave 2 in 5 may also be done. Accordingly, I recommend buying with a target of 1.4017.

Main principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are hard to trade and often change.
2. If you aren't confident in what's happening in the market, it's better to stay out.
3. There will never be 100% certainty about price direction. Don't forget protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.