EUR/USD Analysis on October 8, 2025

[Ben Graham]

The wave structure of the 4-hour EUR/USD chart has remained unchanged for several months, but in recent weeks it has become more complex. It is still too early to conclude that the upward trend section is canceled, but a further decline in the euro will require adjustments.

The formation of the upward trend section continues, while the news background largely does not favor the dollar. The trade war initiated by Donald Trump continues. The confrontation with the Fed continues. The market's dovish expectations regarding the Fed rate are growing. The U.S. "shutdown" continues. The market evaluates the results of Trump's first 7–8 months in office rather poorly, even though GDP growth in the second quarter reached nearly 4%.

At the moment, it can be assumed that impulse wave 5 continues to build, with potential targets stretching up to the 1.25 level. Within this wave, the structure is rather complex and ambiguous, but the higher-scale structure raises few questions. Currently, three upward waves can be seen, meaning the instrument is forming wave 4 inside wave 5, which is taking a three-wave form and may already be completed. The EUR/USD rate dropped another 20 points on Wednesday after losing 55 on Tuesday. The decline in demand for the euro may be linked to the political crisis in France, which has been widely discussed in recent days. However, in my opinion, politics is being discussed only because there's nothing else to talk about. The news background this week is very weak. Tonight, a somewhat interesting FOMC minutes report will be released, but the results of the Fed meeting, the voting on the interest rate, and the overall stance of the regulator are already well known. Tomorrow, Jerome Powell will speak, but what can the Fed Chair comment on if Nonfarm Payrolls, unemployment, and inflation data were not released due to the U.S. shutdown? Certainly, Powell could always surprise. He could, for example, state that the Fed remains committed to easing, since it is clear that one rate cut is not enough to stimulate the labor market. Or, conversely, admit that without economic data, the Fed cannot make a balanced decision without harming the U.S. economy. For now, it remains a mystery.

This morning, Germany released its industrial production report. Volumes in August fell by 4.3%, which can be considered a record drop. The euro had already been falling before the report, as if the market anticipated it. After the release, the decline actually stopped. But overall, demand for the instrument continues to fall, which contradicts the current wave structure.

General Conclusions

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

On a smaller scale, the entire upward trend section is visible. The wave structure is not the most standard, since corrective waves differ in size. For example, the larger wave 2 is smaller than the internal wave 2 of wave 3. However, this also happens. I would remind you that it is better to identify clear structures on charts rather than trying to account for every single wave. Currently, the upward structure raises almost no questions.

The Main Principles of My Analysis

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often change.
2. If you are not confident about what is happening in the market, it is better not to enter it.
3. Absolute certainty in market direction never exists. 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