The wave structure on the 4-hour chart has taken on a less-than-ideal form, but it does not raise serious questions. There is still no talk of canceling the upward trend segment that began in January last year; only its internal wave structure is periodically being adjusted. In my view, the pair has completed the formation of global wave 4 (lower chart). If this assumption is correct, then wave 5 has begun and is currently unfolding. It may turn out to be quite extended, with targets stretching as far as the 1.25 level.

The internal wave structure of the presumed wave 5 is somewhat ambiguous (upper chart). The upward wave sequence cannot be considered impulsive due to fairly strong corrective waves. Therefore, at this stage, it is interpreted as an a-b-c-d-e structure. However, if wave 5 turns out to be extended, its internal structure may also become rather complex. If so, the wave labeling may undergo several more transformations. In any case, I expect further appreciation of EUR/USD, although in the coming days the market may form one or several corrective waves.

On Monday, EUR/USD showed exactly the same range and character of movement as during the previous four days. Out of the last six trading days, market participants were practically inactive on five of them. Last Monday, the U.S. dollar declined across the board following reports that Chinese banks were banned from investing in U.S. government securities. Since then, judging by the charts, there have been virtually no meaningful developments.

There was a minor market reaction to the Nonfarm Payrolls and unemployment rate reports. However, the data could be interpreted in different ways and adjusted to fit either narrative. January figures suggest the labor market may be recovering, yet the full-year 2025 data shows little sign of real improvement. Even if the "cooling" has ended, the reports for 2025 were revised down by an average of 40,000 jobs per month. In other words, each month of last year was effectively reduced by about 40,000 jobs. Is this information really not significant enough to trigger a dollar decline?

Nevertheless, the market remains in complete calm. It is difficult to pinpoint the exact reason, so we are left to rely mainly on wave analysis. In my view, the corrective structure may complete its formation in the 1.1700–1.1800 level, regardless of its final shape. Therefore, I consider this zone attractive for opening new long positions. I do not expect dollar strengthening, except possibly within wave c of the correction.

General Conclusions

Based on the analysis of EUR/USD, I conclude that the instrument continues to form an upward trend segment. Donald Trump's policies and the Federal Reserve's monetary policy remain significant long-term factors weighing on the U.S. dollar. The targets of the current trend segment may extend as far as the 1.25 level.

At present, I believe the pair remains within global wave 5, and therefore I expect price growth in the first half of 2026. However, in the near term, the pair may still form another downward wave within a correction. I believe it is advisable to search for new buying zones and levels, with targets near 1.2195 and 1.2367, which correspond to the 161.8% and 200.0% Fibonacci levels.

On the smaller timeframe, the entire upward trend segment is visible. The wave structure is not entirely standard, as corrective waves vary in size. For example, the higher-degree wave 2 is smaller than the internal wave 2 within wave 3. However, such cases do occur. I would also remind that it is best to identify clear and understandable structures on the charts rather than strictly adhering to labeling every single wave. At present, the upward wave structure raises no doubts.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often subject to change.
2. If you are uncertain about market conditions, it is better to stay out.
3. There is never 100% certainty about market direction. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.