EUR/USD Elliott Wave Forecast: Euro Bulls Need a Break

Current Elliott Wave Analysis

It appears EUR/USD is in wave (v) of ((v)) of 1. If we zoom in to the 4-hour chart, we can see that wave (v) is quite mature as EURUSD appears to be in wave iv of (v). This means EURUSD is fast approaching a final wave at multiple degrees of trend.

Notice the bearish divergence appearing on the 4-hour chart above. This RSI behavior is commonplace on a fifth and final wave of a bullish impulse pattern.

If this count is correct, this implies one more rally to finalize wave ‘1’. Some wave relationships appear near 1.1515. This does NOT mean that EURUSD has to reverse lower at 1.15. However, the conditions are aligning that a medium-term top is developing.

If EURUSD price moves below the wave ‘i’ high of 1.1095, then we’ll reconsider other alternatives including the potential that a medium-term top is in place for wave ‘1’.

On the daily price chart, remember this rally from January 2025 is just the first subwave of a larger five-wave rally. Once the final price of wave ‘1’ is in place, a temporary setback in wave ‘2’ will allow traders to position for another relentless rally in wave ‘3’.

We can use the Fibonacci retracement tool to figure out some potential stopping points for a wave ‘2’ decline.

Assuming EURUSD topped near 1.15, then the next decline in wave ‘2’ may reach 1.05-1.10. I know that is a large range and we can dial it in once it gets going. The main point to remember is that once the top in wave 1 is in place, EURUSD should undergo its largest decline since January AND we anticipate that decline to be temporary.

Bottom Line

EUR/USD is nearing the end of an impulsive rally. We are anticipating another pop higher that may reach 1.1515. Once this final wave is in place, then we anticipate the largest decline since January to begin back towards 1.05-1.10.

Key Level for Bullish Bias: 1.1095; if broken, suggests a medium-term top

Initial Target: 1.1515

Secondary Target: 1.18