26.03.202621:03 Forex Analysis & Reviews: EUR/USD Analysis on March 26, 2026

The wave structure on the 4-hour chart for EUR/USD has changed. There is still no talk of canceling the upward trend segment (lower chart), which began in January of last year; however, the wave structure of the trend now looks very ambiguous. In such situations, I always recommend switching to a lower timeframe (upper chart) and focusing on the simplest and smallest wave structures in order to make a short-term forecast, which is quite sufficient for opening trades. Wave structures can be very complex and allow for many different scenarios. The easiest way to trade is based on the standard "five-three" pattern.

In the chart above, I can identify a classic five-wave impulse structure with an extension in the third wave. If this is indeed the case, then the formation of this structure has been completed, and we should expect a corrective pattern of at least three waves. Therefore, in the near future, we should expect the pair's quotes to rise, but only within a correction relative to the latest trend segment. So far, the recent wave structures do not fit well into the higher-level count, but the situation should become clearer over time. In the near term, a recovery of the euro toward the levels of 1.1666 and 1.1745 can be expected.

The EUR/USD pair declined by another 20–30 basis points during Thursday, and from a wave perspective, all movements over the past week belong to an upward wave structure, which currently does not appear to be complete. I understand that the fate of EUR/USD now depends entirely on the geopolitical background, but I do not want to ignore wave analysis. I just want to remind you that geopolitics is currently more important and stronger than wave patterns. Therefore, if news about new military actions in the Middle East emerges, even an upward corrective structure may be broken.

Yesterday marked the first speech by ECB President Christine Lagarde since the last meeting of the European regulator. In her speech, Ms. Lagarde reaffirmed the Eurozone central bank's commitment to reducing inflation to 2% in the long term. However, based on her statements, the ECB is not ready to act blindly or preemptively. In other words, if the consumer price index in the Eurozone accelerates at a rapid pace, monetary policy tightening would be appropriate, and such a decision would likely be supported by the majority of ECB policymakers. However, without clear evidence that inflation is getting out of control, the regulator is not prepared to raise interest rates, as many had assumed after last week's ECB meeting.

Based on all of the above, inflation reports will be of primary importance in Europe, the UK, and the U.S. over the next one to two months. Central banks will base their monetary policy decisions on these reports. At present, it is generally believed that the ECB and the Bank of England will raise rates this year, while the Federal Reserve will not. However, I reiterate: rate hikes by the ECB and the Bank of England are not guaranteed either.

General Conclusions

Based on the analysis of EUR/USD, I conclude that the pair remains within an upward trend segment (lower chart), while in the short term it has completed a downward wave structure. Since the five-wave impulse structure has been completed, over the next one to two weeks readers can expect a rise in quotes with targets around 1.1666 and 1.1745, which correspond to 38.2% and 50.0% Fibonacci levels. Further movement of the pair will depend entirely on developments in the Middle East.

On a smaller timeframe, the entire upward trend segment is visible. The wave structure is not entirely standard, as corrective waves vary in size. For example, the higher-level wave 2 is smaller than the internal wave 2 within wave 3. However, this can happen. I would like to remind you that it is best to identify clear and understandable structures on charts rather than strictly adhering to every wave. The trend may reverse in the near future.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often change.
2. If there is no confidence in what is happening in the market, it is better to stay out.
3. There is never 100% certainty about market direction. Always remember to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.