EUR/USD Technical Analysis: Analyzing Trends and US Economic Data

Market Overview and Trend Structure

The EUR/USD 4-hour chart indicates that while the long-term upward trend starting in January 2025 remains technically intact, the internal structure has shifted into a corrective phase. The current price action suggests the formation of a wave C, which potentially targets levels below the wave A low. While current fundamentals offer limited support for a significant euro decline, geopolitical volatility remains a persistent factor.

Wave Analysis and Near-Term Outlook

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On the lower timeframe, a completed three-wave upward correction has transitioned into a new downward segment. If this movement develops into an impulsive structure, traders should monitor for potential downside pressure with targets extending toward 1.1400. However, this bearish scenario relies heavily on sustained geopolitical developments, as current negotiations between Iran and the United States continue to temper USD strength.

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Impact of US Economic Indicators

Thursday's trading session reflected mixed sentiment following the release of critical US economic data. While the first-quarter GDP report indicated a slowdown to 1.6%, falling short of market expectations, the dollar experienced countervailing pressure. Although durable goods orders significantly outperformed expectations at +7.9% month-on-month, the market's primary focus remained on the signs of decelerating US economic growth, which limited demand for the greenback.

Geopolitical Risk and Currency Valuation

Geopolitical tensions in the Middle East, specifically regarding the Strait of Hormuz, caused intraday volatility in the EUR/USD pair. Despite the initial dollar-positive reaction to reports of regional instability and diplomatic warnings, the currency struggled to sustain gains. The market appears to be weighing the impact of potential supply chain disruptions against the reality of softening US domestic economic performance.

Analytical Conclusions

From a technical perspective, the EUR/USD is currently navigating a corrective a-b-c wave formation. If the downward trend continues to develop, a breach below 1.1400 is possible; however, should the downward momentum fail to gather sufficient strength, an alternative correction terminating near 1.1578 is plausible. On the higher timeframe, a pullback to the 38.2% Fibonacci retracement level near 1.1352 remains a key watch area for potential long-term trend support.

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