EUR/USD Analysis on November 5, 2025

Ben Graham · Novembro 5

The wave structure on the 4-hour EUR/USD chart has changed — unfortunately, not for the better. It is still too early to conclude that the upward segment of the trend has been canceled, but the recent decline in the euro has made it necessary to refine the wave count. We now see a series of corrective structures. It can be assumed that they are part of the larger wave 4 within the overall upward trend. In this case, wave 4 has taken an unusually extended form, but the general wave pattern still remains coherent.

The formation of the upward trend segment continues, while the news background continues to favor anything but the U.S. dollar. The trade war initiated by Donald Trump is still ongoing. His confrontation with the Federal Reserve also persists. The market's "dovish" expectations for Fed rates remain high, especially looking toward 2026. Meanwhile, the U.S. government shutdown continues, and the labor market is cooling. In my view, the dollar's recent strengthening is somewhat paradoxical—but paradoxes do happen in the markets.

From my perspective, the upward trend structure is not yet complete, and its targets extend up to the 1.25 area. Based on this, the euro may continue to decline for some time—even without strong fundamental reasons (as has been the case over the past month)—but the wave count still suggests the continuation of the upward trend.

The EUR/USD pair continues to fall on Wednesday. As of now, the only significant piece of news worth noting is the ADP employment report. Let me immediately point out that the ADP report is currently the only major indicator reflecting the condition of the U.S. labor market. The JOLTS report, Nonfarm Payrolls, and the unemployment rate are not being published due to the ongoing government shutdown. Therefore, the ADP report—normally a secondary release—temporarily moves into the "important" category.

However, in recent weeks, the market has paid little attention to the broader news landscape. I've long had the impression that the lack of major U.S. statistics is being used by traders as an excuse to buy the dollar, following the principle: "no news means no bad news." Negative data still emerges from time to time, but the market largely ignores it.

The number of new jobs created in the U.S. in October was 42,000. It's clear that this is an extremely low figure and cannot be viewed as positive. Of course, any growth is better than none—as was the case a month ago—but after a month-long dollar rally built on shaky foundations, calling the ADP report "strong" and continuing to increase demand for the dollar seems excessive. Nevertheless, the U.S. currency continues to strengthen, simply because the data came in slightly better than expected.

General conclusions

Based on the current EUR/USD analysis, I conclude that the pair continues forming an upward trend segment. The market is currently in a pause phase, but Trump's policies and the Federal Reserve's stance remain significant factors that could weaken the dollar in the future. The targets for the current trend segment could extend up to the 1.25 level. At the moment, we are likely witnessing the formation of corrective wave 4, which has taken on a complex and prolonged form. Therefore, in the near term, I continue to focus only on buy positions, since all downward movements appear to be corrective in nature. The latest structure — labeled a-b-c-d-e — may be nearing completion.

On a smaller scale, the entire upward trend segment is visible. The wave count is not perfectly standard, as the corrective waves vary in size. For example, the larger wave 2 is smaller in size than the inner wave 2 within wave 3 — but such cases do occur. I would remind readers that it is best to identify clear, readable structures on the chart rather than forcing every move into a rigid wave pattern. At present, the upward structure is quite clear.

Key principles of my analysis:

Wave structures should be simple and clear. Complex formations are hard to trade and often require adjustments.
If there is uncertainty about what is happening in the market, it's better to stay out.
There is never 100% certainty about the direction of price movement — always use protective Stop Loss orders.
Wave analysis can and should be combined with other forms of analysis and trading strategies.

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