Euro Currency: Weekly Preview

[Ben Graham]

Last week did not yield significant results for either buyers or sellers. Despite a strong news backdrop, the importance of which was off the charts, the market experienced yet another banal and dull week according to the charts. Nothing has changed in the wave layout. The presumed wave 3 or C seems to have completed, and the construction of a new downward wave has begun, which could be either 4 or D, or the first wave of a new downward segment of the trend. Why is this the case? Because in recent months, the instrument has been building only corrective structures, which can be three-wave, five-wave, or even considerably more extended. Therefore, to some extent, we can only be confident in the first three waves of each trend segment. The amplitude of movements last week was very low and did not correspond to the strength and nature of the news backdrop. Hence, in the coming week, I intend to rely on wave analysis rather than the news.

Next week, there will be exactly zero reports released in the Eurozone, and no significant events. It is essential to understand that the holiday season is beginning, so there will be minimal news. I am not certain that movements will be weak, but there will be practically no news backdrop, so my readers should focus only on technical and wave factors throughout the day: Fibonacci levels and wave analysis. Based on all of the above, if last week was weak in terms of movements, the upcoming week has even fewer chances for strong movement.

Wave Analysis for EUR/USD:

Based on my analysis of EUR/USD, I conclude that the instrument continues to build an upward trend. Donald Trump's policy and the Federal Reserve's monetary policy remain significant factors in the long-term decline of the U.S. dollar. The targets for the current trend segment could extend up to the 25th figure. The current upward wave collection is starting to develop, and I want to believe that we are now observing the formation of an impulse wave set, which is part of the global wave 5. In this case, we should expect growth with targets around 1.1825 and 1.1926, corresponding to 200.0% and 261.8% on the Fibonacci scale.

Wave Analysis for GBP/USD:

The wave structure for GBP/USD has changed. The downward corrective structure a-b-c-d-e in C at 4 appears to be complete, as does the entire wave 4. If this is indeed the case, I expect the primary trend segment to resume building, with initial targets around the 38 and 40 figures.

In the short term, I anticipated the construction of wave 3 or C, with targets located around the 1.3280 and 1.3360 levels, equating to 76.4% and 61.8% on the Fibonacci scale. These targets have been reached. Wave 3 or C continues to develop, but three unsuccessful attempts to break the 1.3450 mark, which corresponds to 61.8% on the Fibonacci scale, are causing concern—could wave D in 4 now be starting?

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often carry changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is never 100% certainty in market direction. Do not forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

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