EUR/USD Technical Analysis: Wave Patterns and Geopolitical Impact

EUR/USD Technical Outlook

The 4-hour EUR/USD chart currently displays a shift in wave structure. While the broader upward trend initiated in early 2025 remains technically intact, the current price action reflects a corrective phase. Analysts are monitoring the potential for a wave C development, which could test levels below the previous wave A lows, though such a significant decline remains contingent on evolving geopolitical factors.

Would you like to read more good news about EUR/USD, Analysis, and Impact?

On lower timeframes, the pair recently completed a three-wave corrective structure. A new downward trend segment is currently in progress, which, if impulsive, may signal the initiation of a five-wave structure. Price targets for this potential move lie below the 1.1400 support level, though a sustained USD rally of this magnitude appears unlikely given recent diplomatic signals.

Geopolitical Influence on Market Direction

Recover from drawdowns intelligently with the Auto Recovery Expert Advisor for MT4/MT5. Learn more.

Market sentiment received a slight lift on Monday following reports that the US and Iran may resume negotiations. Washington has signaled a potential temporary suspension of sanctions related to Iranian oil exports. While the logistical feasibility of these concessions remains uncertain due to existing naval blockades, the softening of rhetoric has tempered expectations for further USD strength.

The US administration’s shift in stance, driven by domestic concerns regarding fuel prices and the upcoming electoral cycle, suggests a pragmatic pivot toward de-escalation. If these diplomatic efforts continue, the current downward trend segment for EUR/USD may face significant resistance. Investors are closely watching for further developments, as a positive geopolitical outcome could lead to an early conclusion of the current corrective wave.

Summary and Forecast

Current wave analysis suggests the EUR/USD pair is navigating a corrective sequence, with the potential for wave C to target the 1.1352 area, aligning with the 38.2% Fibonacci retracement level. Should this corrective structure finalize, the broader market setup remains supportive of a long-term bullish resumption.

Market participants should note that wave counts are dynamic and subject to change based on external catalysts. The absence of confirmed geopolitical stability implies that traders should prioritize risk management, including the use of stop-loss orders, as the market balances technical correction against fundamental headline risk.

Enhance your trading strategy with advanced tools from RobotFX. Explore our expert advisors and indicators at www.robotfx.org.