The wave pattern on the 4-hour EUR/USD chart has changed — unfortunately, not for the better. It's still too early to conclude that the upward trend segment has ended, but the recent decline in the euro has made it necessary to adjust the wave structure. Now, we see a series of corrective formations. It can be assumed that they form part of the larger wave 4 within the current upward trend. In that case, wave 4 has taken on an unusually extended form, but the overall integrity of the wave pattern remains intact.

The construction of the upward trend segment continues, while the news background still mostly fails to support the dollar. The trade war launched by Donald Trump is ongoing. The President's confrontation with the Fed continues. Market expectations of "dovish" Fed policy remain strong — especially for 2026. In the U.S., the government shutdown persists. The labor market is cooling. In my view, the recent strengthening of the dollar is somewhat paradoxical — but paradoxes do happen in financial markets.

In my opinion, the upward trend formation is not complete, and its targets extend up to the 1.25 level. Therefore, the euro may continue to decline for some time without strong fundamental justification (as has been the case over the past month). Nonetheless, the wave pattern still suggests a bullish trend continuation.

The EUR/USD rate fell by only 10 basis points by the start of the U.S. session on Monday. Once again, I want to draw attention to the very weak market volatility, and the euro's decline is even weaker. This might seem insignificant, but I believe it reflects the true weakness of sellers.

I think that buyers are not yet ready to build a new upward segment, and therefore they simply aren't entering the market. Thus, it's not that sellers are strong right now — it's that buyers are absent, and sellers are doing what they can. The wave structure clearly indicates a corrective nature for the current wave, wave set, and overall trend segment, which began back in early July. Therefore, my view on EUR/USD remains unchanged — I expect a new strong rally.

At this stage, even the news background doesn't play a decisive role for market participants. We need to wait until buyers return to the market, after which it will make sense to analyze the balance of power between them and sellers. In any case, the last corrective pattern a-b-c-d-e now looks nearly complete, so we should wait for its finalization. After that, the formation of a new bullish wave set should begin, and its character will help determine whether the next phase is impulsive or corrective.

General Conclusions

Based on the EUR/USD analysis, I conclude that the instrument continues to build an upward trend segment. At present, the market is in a pause phase, but Donald Trump's policies and the Fed's stance remain significant factors that could drive the U.S. dollar lower in the future. The targets of the current trend segment could reach the 1.25 level. Currently, we appear to be forming a corrective wave 4, which looks complex and extended. Therefore, in the near term, I continue to favor buying opportunities, since all downward movements remain corrective in nature. The latest structure (a-b-c-d-e) appears to be nearing completion.

On a smaller scale, the entire upward trend can be clearly seen. The wave structure is not entirely standard, since the corrective waves differ in size — for example, major wave 2 is smaller than inner wave 2 within wave 3. However, this does happen. Let me remind you that it's best to identify clear and readable structures on charts, rather than overanalyzing every single wave. At this point, the bullish structure raises a few questions.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex ones are difficult to trade and often change form.
2. If you're uncertain about what's happening in the market, it's better to stay out.
3. Absolute certainty in price direction is impossible. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.