10.04.202520:24 Forex Analysis & Reviews: EUR/USD Analysis – April 10th

The wave pattern on the 4-hour chart for the EUR/USD pair has shifted to a bullish structure. I believe there is no doubt 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 entire wave structure was forming a convincing bearish trend, developing a corrective wave 2. However, Trump's weekly announcements of various new tariffs took their toll. Demand for the U.S. dollar began to fall rapidly, and now the entire trend segment that began on January 13 has taken on a five-wave impulsive form.

Given this, we should now expect the formation of corrective wave 2 of the new bullish trend segment, which may consist of three waves. After that, the U.S. dollar is likely to continue declining—unless Donald Trump reverses his trade policy by 180 degrees. We've witnessed a clear case where the news background changed the wave structure.

On Thursday, the EUR/USD pair rose by 220 basis points. Demand for the U.S. dollar is once again declining, and the market can't even build a simple three-wave correction—something that would provide a clear basis to continue selling the dollar if that's what the market intends. Yesterday evening, Trump finally shifted from anger to leniency and lifted all tariffs above 10% for every country except China. He justified this by saying that 75 countries had essentially lined up at the White House, eager to negotiate and make deals with the U.S. So, Trump decided to give everyone a break and cut tariffs to the minimum for 90 days.

One might expect a de-escalation of the trade conflict and a strengthening of the U.S. dollar, especially since demand for it had been falling on escalation news. However, I don't see the U.S. currency gaining value, even when both the news flow and the wave structure suggest it should. The reason is simple: the market doesn't see real change, and it doesn't trust Trump.

The U.S. president can reverse any of his decisions within 24 hours. That's why confidence in his 90-day pause is just slightly above zero. Moreover, tariffs against the main trade adversary—China—have not been lowered. On the contrary, they've been raised to 125% "because Beijing continues to rob the U.S. and refuses to negotiate." So, this de-escalation is only temporary and may end well before the three-month mark.

General Conclusions

Based on the current EUR/USD analysis, I conclude that the pair has begun building a new bullish trend segment. Serious concerns remain focused on Donald Trump. If his actions reversed one trend, they can certainly reverse another. Therefore, in the near future, the wave structure will be entirely dependent on the position and actions of the U.S. president. This must always be kept in mind. Based purely on wave analysis, we should now expect the formation of a corrective wave sequence, which traditionally consists of three waves. After that, a new upward wave should follow, and we can start looking for long entry points with targets well above the 1.10 area.

On the higher time frame, the wave pattern has also shifted into a bullish structure. Most likely, we're in for a long-term upward sequence of waves—but the news background, especially from Donald Trump, could turn everything upside down again.

Core Principles of My Analysis:

1. Wave structures should be simple and clear. Complex formations are difficult to trade and often indicate potential reversals.
2. If you're uncertain about what's happening in the market, it's better to stay out.
3. There can never be 100% certainty in price direction. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.