14.05.202517:59 Forex-elemzések és áttekintések: EUR/USD Analysis on May 14, 2025

The wave structure on the 4-hour chart for the EUR/USD pair has shifted to a bullish formation and continues to hold that stance. I believe no one doubts that this transformation occurred solely due to the new U.S. trade policy. Until February 28, when the sharp decline of the U.S. dollar began, the wave pattern was forming a convincing downward trend segment, building out corrective wave 2. However, Donald Trump's weekly announcements of various tariffs took their toll. Demand for the U.S. dollar started to plummet, and now the entire trend segment, beginning on January 13, has taken on an impulsive upward form.

The market didn't even manage to form a convincing wave 2 within this trend segment. Only a small pullback appeared, smaller in size than the corrective waves in wave 1. However, the U.S. currency may continue to decline unless Donald Trump dramatically reverses his adopted trade policy—which, as demonstrated on Monday, he very well might.

The EUR/USD rate increased by 100 basis points on Tuesday and another 100 on Wednesday, effectively erasing Monday's drop. On Monday, many market participants regained hope, believing the "dark days" for the dollar were over—but Tuesday and Wednesday proved that assumption wrong. Even though the U.S. and China moved toward de-escalating the trade war, the dollar didn't benefit. In my view, the problem for the dollar is no longer the trade war or the Fed's monetary policy. The issue lies with Donald Trump himself. Trust in the U.S. economy is declining; trust in a government that could spark a conflict at any moment is inherently low. Thus, the market is signaling that no matter how many deals Trump signs, it is not ready to return to the dollar.

From a wave analysis perspective, though, everything looks quite favorable. The bullish trend segment continues to develop—something that would hardly be possible under normal circumstances when the market responds sensitively to news negative for the dollar. If traders prioritized the trade war, then the de-escalation has already begun. A deal with the UK has been signed, tariffs for most countries have been reduced to 10%, and tariffs with China have been cut by 70–80%. What more does the market need to increase demand for the U.S. currency?

However, if the market has simply decided to sell the dollar regardless of the reasons (which seems more likely), then no news will spark renewed demand for the dollar.

General Conclusions

Based on the EUR/USD analysis, I conclude that the instrument continues to build a bullish trend segment. In the near term, the wave structure will entirely depend on the position and actions of the U.S. president. This should be kept in mind at all times. Wave 3 of the upward trend has begun, and its targets may extend up to the 1.25 level. Their achievement will depend solely on Trump's policies. At this point, wave 2 within wave 3 appears to be nearing completion. Therefore, I consider buying with targets above the 1.1572 level, which corresponds to 423.6% on the Fibonacci scale. However, Trump could easily reverse the upward trend at any moment.

On the higher time frame, the wave structure has also transitioned to bullish. A long-term sequence of upward waves is likely ahead—but Trump's headlines can still turn everything upside down once again.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are hard to trade and prone to frequent changes.
2. If you're uncertain about the market, don't enter it.
3. There's never 100% certainty in market direction. Always use protective Stop-Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.