The wave pattern on the 4-hour chart for EUR/USD continues to indicate the formation of an upward trend segment. The trade war initiated by Donald Trump was intended to boost budget revenues and reduce the trade deficit. However, these targets have not yet been achieved—trade deals are being signed with great difficulty, and Trump's "One Big Law" will add another 3 trillion dollars to U.S. national debt in the coming years. Demand for the dollar began to decline rapidly at the start of the year, and now the entire trend segment beginning on January 13 has taken on an impulsive upward form.

At present, wave 3 within wave 3 is presumably still forming, which could become much longer than it currently is. However, the internal structure has acquired a five-wave form and may therefore be nearing completion. If the current wave structure is accurate, prices will likely continue to rise over the coming weeks and months, but in the short term, we may see the formation of a corrective wave pattern. The U.S. dollar will remain under pressure unless Donald Trump completely reverses his trade policy direction. The chances of that happening are extremely low, but anything could happen on July 9.

The EUR/USD rate declined by just 30–40 basis points on Wednesday, which does not affect the current wave count. As mentioned earlier, we now observe a clear and completed five-wave structure, which allows for the expectation of a short-term decline in the euro. How the market will justify selling the pair when the news flow only supports buying is not entirely clear at this stage. However, I don't think market participants will have much trouble retreating briefly before launching a new upward move.

This week, central bank heads spoke multiple times at an economic forum in Portugal. Christine Lagarde, in particular, stated once again that the ECB is close to ending its monetary policy easing cycle and that there are risks of rising inflation due to ongoing uncertainty over the trade war with the U.S. Based on this, I believe the ECB will not cut rates at its upcoming meeting, though this is not a critical piece of news for the euro.

Today, the U.S. ADP employment report for the nonfarm private sector was released. For the first time in more than two years, the figure came in negative—minus 33,000. This raises the likelihood that the Nonfarm Payrolls report due tomorrow will also disappoint dollar bulls. That is why I believe demand for the U.S. currency will be slow to recover—if it does at all. The only current support for the dollar is the wave structure.

Key conclusions:

Based on the EUR/USD analysis, I conclude that the pair is continuing to build an upward trend segment. The wave structure remains entirely dependent on the news background—particularly decisions made by Trump and U.S. foreign policy. So far, there are no positive developments. The target for wave 3 may extend as far as the 1.2500 level. Therefore, I continue to view buying opportunities with a target around 1.1875, which corresponds to the 161.8% Fibonacci extension. In the near future, we can expect the formation of a corrective wave pattern, after which new long positions may be considered.

Key principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are harder to trade and often shift.
2. If there is uncertainty about the market, it's better to stay out.
3. There is 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.