EUR/USD Analysis on September 29, 2025

[Ben Graham]

The wave markup of the 4-hour chart for EUR/USD has not changed for several months, but in recent days it has started to look rather complicated. It is still too early to conclude that the upward trend section has been canceled, though a more complex wave structure is possible in the near future.

The upward section of the trend continues to build, and the news background continues to mostly support currencies other than the dollar. The trade war initiated by Donald Trump continues. The standoff with the Fed continues. Market expectations of a dovish Fed rate outlook are rising. The market's assessment of Trump's first 6–7 months in office is very low, even though GDP growth in the second quarter was nearly 4%.

At the moment, we can assume 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 quite complex and ambiguous, but on the larger scale it raises no particular doubts. Currently, three upward waves can be observed, meaning the instrument has moved to constructing wave 4 of 5, which takes the form of a three-wave structure. A deeper decline in quotes would require adjustments to the current markup.

The EUR/USD rate rose another 40 basis points during Monday, but the day is not yet over. A new "dark cloud" is looming over the dollar, which may trigger a fresh wave of selling pressure on the U.S. currency. Recall that in the past couple of weeks the dollar had been performing quite well, supported by the U.S. GDP report and Jerome Powell's uncertainty regarding further monetary policy moves. The market dislikes uncertainty. If that uncertainty concerns the dollar, the market tends to get rid of it.

On Monday, it became known that as soon as Wednesday many U.S. government institutions could shut down. Of course, not permanently, but until Republicans reach an agreement with Democrats. Enter a new U.S. government shutdown. Once again, the sticking point is the usual question—finances. The country's two main parties cannot agree on the spending structure for the next fiscal year. Without a signed budget, funding may stop on October 1.

However, markets have grown somewhat accustomed to shutdowns, thanks to Donald Trump. The problem is different this time. Now the shutdown could threaten not only the temporary suspension of government operations but also mass layoffs, as stated by the president himself. In addition, it is unclear how the Bureau of Statistics will function during these days, or what data it will compile if operations are interrupted and layoffs occur. The dollar may fall this week not because of poor data, but due to a lack of data altogether, adding even more uncertainty for the U.S. economy and currency.

General Conclusions

Based on the analysis of EUR/USD, I conclude that the instrument continues to build its upward trend section. The wave markup still depends entirely on the news background related to Trump's decisions and the domestic and foreign policies of the new White House administration. The targets of the current trend section may extend to the 1.25 level. At present, a corrective wave 4 is forming, which may already be complete. The upward wave structure remains valid. Therefore, in the near future I only consider buying trades. By the end of the year, I expect the euro to rise to 1.2245, which corresponds to the 200.0% Fibonacci level.

On a smaller scale, the entire upward section of the trend is visible. The wave markup is not entirely standard, since the corrective waves differ in size. For example, the larger wave 2 is smaller than the inner wave 2 of 3. However, this also occurs. I remind you that it is best to isolate clear structures on the chart rather than trying to tie every single wave. At present, the upward structure raises almost no questions.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often undergo changes.
2. If you are not confident in what is happening on the market, it is better not to enter.
3. There can never be 100% certainty in the direction of movement. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.

The material has been provided by InstaForex Company - www.instaforex.com