EUR/USD Elliott Wave: 3rd Wave Accelerates

EUR/USD Rally Accelerates

EUR/USD has been in rally mode once a major bottom formed on January 13.

Previously, on “Gap Down Fully Retraced” (February 5, 2025), we shared the ending diagonal pattern into the low on January. As a result, “…the next wave tends to be a swift retracement. This implies a large and swift rally is underway to target the origin of the diagonal (1.1214).”

A few weeks later and this swift rally has appeared carrying towards our cited target levels.

How does the Elliott wave pattern look now and are the previously forecasted targets impacted by this week’s trend?

EUR/USD Elliott Wave Analysis

EUR/USD has trended about 500 pips higher since the previous forecast on February 5. This week’s rally appears to be the middle of wave ((iii))* of 1 of (3) that we mentioned a month ago. There are some minor wave relationships appearing near 1.0880. This implies wave ((iii)) may top fairly soon.

*Please note, in my previous forecast, I had the degree of trend listed as (iii) and it should have been ((iii)).

However, there is a cluster of stronger market geometry appearing near 1.12. This cluster could be a topping zone for wave ((iii)) OR provide the topping zone for wave 1.

Regardless of where wave ((iii)) and wave 1 top, those waves are subwaves of a larger wave (3). This means the target levels for wave (3) are significantly higher and initially near 1.18, then 1.28 and possibly higher levels.

Either way, dips are likely to remain on the shallow end while the trend remains to the upside.

For the time being EUR/USD should hold comfortably above 1.0533. Once it appears wave ((iii)) is in place, then we can provide some estimates where wave ((v)) of 1 reaches.

Key Level for Bullish Bias: 1.0533

Initial Target: 1.12

Secondary Target: 1.18