16.09.202519:00 Forex Analysis & Reviews: EUR/USD Analysis on September 16, 2025

The wave structure on the 4-hour chart for EUR/USD has not changed for several months, which is encouraging. Even during the formation of corrective waves, the integrity of the structure remains intact, allowing accurate forecasts. Wave patterns do not always look like textbook examples, but the current structure does.

The upward trend segment continues to build, and the news backdrop largely supports not the dollar. The trade war initiated by Donald Trump continues. The confrontation with the Fed continues. The market's dovish expectations regarding Fed rates are growing. Market assessments of Trump's first 6–7 months in office are very low, despite 3% GDP growth in Q2.

At present, it can be assumed that the construction of impulse wave 5 is ongoing, with potential targets extending up to the 1.25 level. Within this wave, the structure is complex due to the sideways movement observed in the past month. Nevertheless, waves 1 and 2 can be distinguished. Thus, I believe the instrument is now within wave 3 of 5.

The EUR/USD exchange rate rose by several dozen basis points on Tuesday. The current movement fully aligns with both the news backdrop and the wave count. Therefore, I continue to expect only further growth. Of course, the wave count may require adjustments under news pressure, but so far in 2025 wave structures resemble textbook examples, with the news background not contradicting them in most cases.

There remain plenty of reasons for the market to keep selling the troubled dollar. Every day one can list the same set of factors that continue to weigh on demand for the U.S. currency. The U.S. dollar continues to weaken while the president interferes with the independence of the central bank, attempts to remove FOMC officials, announces new tariffs and sanctions, and spends a significant portion of his term outside core economic policy matters. According to news agencies, approximately one-third of his second term has been spent on golf courses.

Returning to the economic data. Today, the Eurozone released its industrial production report, showing a 0.3% increase in July. This is very weak growth, but the market will take it positively, as Eurozone production more often declines than grows. For the euro, however, this is not an issue. It continues to strengthen against the weakening dollar. Some additional support came from Germany's ZEW Economic Sentiment Index, which unexpectedly rose to 37.3 points compared to market expectations of 26.3 points.

General conclusions

Based on the EUR/USD analysis, I conclude that the instrument continues to build an upward trend segment. The wave structure still fully depends on the news background tied to Trump's decisions, as well as the foreign and domestic policies of the new administration. The trend segment targets may extend up to the 1.25 level. Since the news backdrop remains unchanged, I continue to view purchases with first targets around 1.1875, equivalent to the 161.8% Fibonacci level, and higher.

On a smaller scale, the entire upward trend segment is visible. The wave structure is not perfectly standard, as corrective waves differ in size. For example, the larger wave 2 is smaller than the inner wave 2 of 3. But such cases do occur. It is best to identify clear structures on the chart rather than fixating on every wave. The current upward structure raises virtually no doubts.

Key principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often change.
2. If there is no confidence in the market situation, it is better not to enter.
3. Absolute certainty about the direction is impossible. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.