EUR/USD and GBP/USD Technical Analysis: Wave Patterns and Outlook

Geopolitical Context and Market Sentiment

Market discussions regarding U.S. foreign policy toward Iran suggest that Washington is exploring exit strategies for the ongoing conflict. Analysts note that geopolitical developments could influence voter sentiment ahead of upcoming Congressional elections, potentially impacting broad market volatility.

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From a strategic perspective, the failure to achieve primary military objectives over the last five months remains a point of concern. Potential scenarios involving the withdrawal of U.S. forces or shifts in regional energy security, particularly regarding the Strait of Hormuz, are being closely monitored for their long-term implications on global market stability.

EUR/USD Technical Outlook

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The EUR/USD pair is currently positioned within a broader upward trend, despite short-term downward correction phases. Technical indicators suggest that the current market environment may be suitable for initiating long positions, even if the price targets the 1.1300 level within the ongoing wave C structure.

Wave analysis indicates that investors should remain cautious, as the market may present unexpected shifts. While a minor pullback is possible, the current structure favors a constructive approach to long-term exposure.

GBP/USD Technical Outlook

The GBP/USD pair displays a more complex wave formation compared to the euro. Current projections suggest the possibility of an additional downward wave, which may serve as a correction before the initiation of a new, more sustained upward trend.

Following the potential conclusion of this downward correction, technical targets are identified in the 1.3700–1.3800 range. Traders should monitor the divergence between the euro and the pound, as it remains relatively minor and does not fundamentally alter the bullish outlook for the sterling.

Trading Principles

Successful market participation relies on maintaining simple, understandable wave structures to avoid unnecessary complexity. Investors are reminded that market certainty is never absolute, and strict adherence to risk management, including the use of stop-loss orders, is essential for capital preservation.

Combining wave analysis with broader fundamental assessments can improve decision-making accuracy. Maintaining a disciplined approach to entries and exits remains the most effective way to navigate periods of geopolitical or macroeconomic uncertainty.

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