Forex Analysis & Reviews: 17.06.2025 - EUR/USD Analysis on June 17,...

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17.06.2025 09:18 PM

EUR/USD Analysis on June 17, 2025

The wave pattern on the 4-hour EUR/USD chart continues to indicate the development of an upward trend segment. This transformation occurred solely due to the new U.S. trade policy. Until February 28, when the decline of the U.S. dollar began, the entire wave pattern appeared to form a convincing downward trend. A corrective wave 2 was being constructed. However, the start of Donald Trump's trade war—intended to boost budget revenues and reduce the trade deficit—has so far only hurt the dollar. Demand for the greenback has fallen sharply, and the entire trend segment starting from January 13 has now taken on an impulsive bullish structure.

Currently, wave 3 of 3 is presumed to be in progress. If this assumption holds, then the upward momentum may continue over the coming weeks and months. However, the U.S. dollar will likely remain under pressure unless Donald Trump completely reverses his trade policy—a scenario that seems extremely unlikely. At present, there is little reason to expect a strong dollar rebound.

EUR/USD lost about 40 basis points on Tuesday, with low intraday volatility. The market showed no interest in the ZEW economic sentiment reports from Germany and the Eurozone. Nor did any other news manage to shift prices ahead of the Fed's policy meeting. This is a key point that deserves closer attention.

Just look at the chart: the euro reached the 1.16 level back in April, then pulled back, only to resume its steady climb. Now, just 24 hours before the FOMC decision, the price is hovering at its highest levels since October 2021, while market activity is minimal. I believe market tension has reached a critical point, and a significant movement may occur soon. This move could be triggered not only by the Fed meeting, but also by a possible U.S. military strike on Iran. Today, Donald Trump called for all civilians to evacuate Iran—as if preparing for such an attack. If Washington does strike, it would become a direct party to the war, which is unlikely to please market participants. Then again, they seem impossible to please at this point.

As for the Fed, expecting a more hawkish stance is futile. Expecting a rate cut is also unlikely. Counting on dollar strength at this stage seems like an act of charity. If demand for the greenback is declining even while FOMC rates remain unchanged, what can we expect tomorrow night, especially if the Fed maintains its rate or hints at future easing (a bearish signal for the dollar)?

Conclusions

Based on the EUR/USD analysis, the pair continues to build out its upward trend segment. The wave pattern remains entirely dependent on the news background, especially developments tied to Trump's decisions and U.S. foreign policy. The targets of wave 3 could extend to the 1.25 level. I am therefore considering buying opportunities, with initial targets around 1.1708 (127.2% Fibonacci extension) and higher. A de-escalation of the trade war could reverse the upward trend, but for now there are no signs of reversal or easing.

On the higher wave scale, the structure has transitioned into a bullish configuration. A long-term upward wave cycle is likely unfolding, but political decisions from Trump could once again turn the market upside down.

Key Principles of My Analysis

Wave structures must be simple and clear. Complex formations are hard to trade and often signal shifts.
If you're unsure about market direction, it's better to stay out.
There's never 100% certainty in price movement. Always use protective Stop Loss orders.
Wave analysis can be combined with other forms of analysis and trading strategies.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.