EUR/USD Analysis on November 21, 2025

[Ben Graham]

The wave pattern on the 4-hour chart for EUR/USD has changed, but overall it still looks fairly clear. There is no talk of canceling the upward trend segment that began in January 2025, but the wave structure since July 1 has become significantly more complex and extended. In my view, the instrument is in the process of forming corrective wave 4, which has taken on an unconventional form. Within this wave, we observe exclusively corrective structures, so there is no doubt about the corrective nature of the decline.

In my opinion, the upward trend segment is not yet complete, and its targets extend up to the 1.25 level. The a-b-c-d-e wave sequence appears to be complete; therefore, in the coming weeks I expect the formation of a new upward wave set. We have seen the presumed wave 1 or a, and the instrument is now forming wave 2 or b. I expected the second wave to complete in the 38.2%–61.8% Fibonacci zone of wave one, but today the quotes dropped to 76.4%. Such a decline still allows for the formation of wave 3 or c.

The EUR/USD rate declined by 20 basis points on Friday. Time and time again, I have to point out the extremely weak movement amplitude observed in recent weeks and months. Essentially, since yesterday the value of the euro has not changed at all, as a 20-point move is simply noise. The price literally cannot avoid moving at least 1 point, so we see 20–30 point intraday moves that carry almost no significance.

This morning in Germany, reports were released that became a problem for the euro, which had only just begun to strengthen. In November, manufacturing activity fell from 49.6 to 48.4 points. The services sector—traditionally stronger—could have saved the euro, but no: business activity fell from 54.6 to 52.7 points. The broader Eurozone data could also have helped, but the services index rose by only 0.1 point, and the manufacturing index fell by 0.3 points, once again sliding below the 50.0 threshold. Therefore, the market paid more attention to the German indices, reacted to them quite logically, and EUR/USD once again failed to begin forming an upward wave.

Given all the above, it follows that even important news cannot currently push market participants to trade more actively. Yesterday in the U.S., labor market and unemployment reports were released—and what happened? The same 20–30 point moves.

General Conclusions

Based on the EUR/USD analysis, I conclude that the instrument continues to form an upward trend segment. The market has taken a pause over the past few months, but Donald Trump's policies and Federal Reserve decisions remain substantial factors for a future decline in the U.S. currency. The targets of the current trend segment may extend up to the 1.25 level. At the moment, the formation of an upward wave set may continue. I expect that from current levels, the formation of the third wave of this structure will begin, which could be either wave c or wave 3. In the coming days, I am considering buying with targets near 1.1740, and an upward reversal of the MACD indicator will confirm this signal.

On the smaller scale, the entire upward trend section is visible. The wave pattern is not the most standard, as the corrective waves differ in size. For example, the larger wave 2 is smaller than the internal wave 2 within wave 3. However, this also happens. I remind you that it is best to identify clear structures on the chart without necessarily trying to mark every single wave. The current upward structure raises no doubts.

The Main Principles of My Analysis:

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

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