20.02.202620:12 Forex Analysis & Reviews: EUR/USD Analysis on February 20, 2026

The 4-hour chart wave count for EUR/USD is not ideal but clear enough. There is no indication that the uptrend that began in January last year has been canceled; only the internal wave structure is occasionally adjusted. In my view, the pair has completed the construction of the global wave 4 (see lower chart). If this assumption is correct, wave 5 is currently forming, which could be quite extended, with targets reaching as high as the 25-handle level.

The internal structure of the projected wave 5 is not entirely straightforward (see upper chart). The upward sequence of waves cannot be considered a clear impulse due to strong corrective waves. At present, it is interpreted as a-b-c-d-e. However, if wave 5 becomes extended, its internal structure will also be complex, which may require multiple transformations of the wave count. In any case, I expect EUR/USD to resume upward movement, and the a-b-c corrective structure already appears complete.

EUR/USD changed very little on Friday, despite expectations of at least a 100-point gain. The lack of a natural decline in the U.S. dollar, in my view, answers most questions that may have accumulated for my readers over the past two weeks.

Recall that the unusual movements began last week: the Nonfarm Payrolls report for 2025 initially disappointed, and the Consumer Price Index fell sharply to 2.4%. At that time, many market participants considered the January U.S. labor market data more important, and they did not believe the Federal Reserve would lower rates despite strong inflation deceleration.

However, the dollar has steadily appreciated over the past two weeks. Is the U.S. economy now so strong that the market only thinks about buying the dollar? What changed in two weeks that caused such a sharp reversal? Friday provided answers:

• In the morning, Eurozone and German business activity indices were released, exceeding expectations — pleasing everyone except euro buyers.
• In the afternoon, the U.S. Q4 GDP report showed growth of 1.4% (well below the 3% expected and down from 4.4% in Q3). Despite the sharp deviation from market expectations, demand for the U.S. dollar remained nearly unchanged.

From this, I conclude that the market is currently ignoring economic data, focusing instead on other topics that will be addressed in future reports.

Overall Conclusions

Based on the EUR/USD analysis, the instrument is still in an upward segment of its trend. Donald Trump's policies and the Fed's monetary stance remain significant factors limiting long-term dollar weakness. Current trend targets could reach as high as the 25-handle.

At present, the instrument remains within global wave 5, so I expect EUR/USD to rise in the first half of 2026. The a-b-c corrective structure may end at any moment, as it already appears complete. Currently, it is reasonable to look for areas and levels for new long positions, with targets near 1.2195 and 1.2367, corresponding to 161.8% and 200.0% Fibonacci levels.

On a smaller scale, the entire upward segment of the trend is visible. The wave count is non-standard because corrective waves vary in size. For example, the larger wave 2 is smaller than the internal wave 2 within wave 3. Such variations are normal. It is more important to identify clear structures on the chart rather than strictly follow every wave. The current upward wave structure is unambiguous.

Key Principles of My Analysis

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often change.
2. If you are not confident about market conditions, it is better to stay out.
3. There is no 100% certainty in price direction — never forget protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.