28.07.202500:48 Forex Analysis & Reviews: Euro Currency – Weekly Preview

There will be few news events in Europe. However, they are not particularly necessary. The U.S. will have a very intense and diverse news cycle. As a result, market participants will have plenty of motivation for active trading. Let me remind you that the European Central Bank recently held its fifth meeting of the year and, for the first time, left all parameters of monetary policy unchanged. The market did not react to these "changes" in the ECB's stance at all. Still, there will be a few events in the Eurozone worth watching. They will certainly remain overshadowed by U.S. news, but nonetheless.

What personally interests me most is the economic growth data for the second quarter. According to market expectations, the EU economy may show a 0% increase quarter-over-quarter and 1.2% year-over-year. These are very low figures, but they will contrast sharply with U.S. GDP. The U.S. GDP is expected to grow by 2.5%, which is significantly higher than in the EU and also more than in the first quarter. Therefore, market participants may receive direct confirmation that Donald Trump's tariffs are working and that the U.S. president was right in his forecasts.

Let me remind you that Trump promised the economic downturn would be short-term, followed by strong growth. Of course, we first need to see the U.S. GDP data before making conclusions. Moreover, drawing conclusions based on just one quarter is not entirely appropriate. Nevertheless, second-quarter GDP reports may support sellers.

However, there are even more important events in the new week, and Friday promises to be explosive. First, Friday is August 1, which means all the tariffs Trump has been discussing over the past three weeks will go into effect. Second, Friday will bring U.S. labor market and unemployment reports — arguably the only reports that could push the Federal Reserve to resume a monetary easing cycle. And on Wednesday evening, the Fed will hold a meeting where it again intends to leave the interest rate largely unchanged.

Wave Pattern for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward trend segment. The wave structure remains entirely dependent on the news background, especially on decisions made by Trump and U.S. foreign policy, where no positive changes are currently evident. The targets of the trend segment could reach as far as the 1.25 area. Therefore, I continue to consider long positions with targets near 1.1875 (corresponding to a 161.8% Fibonacci level) and higher. The failed attempt to break through 1.1572 (which corresponds to 100.0% Fibonacci) indicates the market's readiness for new buying activity. The assumed wave 4 may take a three-wave corrective form.

Wave Pattern for GBP/USD:

The wave structure for GBP/USD remains unchanged. We are dealing with an upward, impulsive segment of the trend. Under Trump, the markets may still experience many shocks and reversals, which could significantly impact the wave structure. However, for now, the primary scenario remains intact. The targets of the upward trend segment are now located around the 1.4017 level, which corresponds to 261.8% Fibonacci from the assumed global wave 2. Currently, a corrective wave set is forming within wave 4. Classically, it should consist of three waves, but the market may well limit it to just one.

Core Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often subject to changes.
2. If there is no confidence in the market situation, it's better to stay out.
3. There is never 100% certainty about the market direction. Don't forget to use protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.