Forex Analysis & Reviews: 16.06.2025 - Euro Currency: Weekly...

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16.06.2025 12:38 AM

Euro Currency: Weekly Preview

The European currency continues to benefit from the weakness of the U.S. dollar, which became fully apparent after Donald Trump returned to the scene. Honestly, discussing how Trump—or the events triggered by him—continues to influence market movements every single day is becoming tiresome. However, it needs to be addressed because the U.S. president remains a central figure, not just for the currency market but for the entire world.

There were many events last week. The EU published several important reports, but who's paying attention to them now when everyday global events shake not only the markets but public sentiment as well? The more such upheavals occur, the weaker the dollar becomes. And as we've come to understand, there's only one reason for this.

Market participants currently ignore the European Central Bank's monetary policy easing, even as the Federal Reserve keeps its rate unchanged. As a result, even decent U.S. reports (like the Nonfarm Payrolls or unemployment rate) are dismissed by traders. In the upcoming week, the news landscape in the European Union will be notably weak. I won't delve into the inflation report for May or the economic sentiment indices, as they currently lack significance.

The market will remain focused on geopolitical conflicts, which only multiply over time. It will focus on the unrest in the U.S. and how it's being suppressed. It will be waiting for new Trump statements on fighting global trade injustice, for negotiations with China and the EU, and to see how the Israel-Iran conflict unfolds. These events will determine the dollar's fate—and, therefore, the EUR/USD and GBP/USD pairs. As for positive news for the greenback, it's hard to expect any. I believe the dollar will remain under pressure in the coming week.

Wave Analysis for EUR/USD:

Based on my EUR/USD analysis, I conclude that the pair continues building a bullish trend segment. The wave count depends entirely on the news flow related to Trump's decisions and U.S. foreign policy. The targets for wave 3 could extend as far as the 1.25 area. Accordingly, I am considering long positions with targets around 1.1708, corresponding to the 127.2% Fibonacci level and higher. A de-escalation in the trade war could reverse the bullish trend downward, but currently, there are no signs of reversal or de-escalation.

Wave Analysis for GBP/USD:

The wave pattern for GBP/USD remains unchanged. We are dealing with a bullish, impulsive trend segment. Under Trump, the markets could face many more shocks and reversals that do not align with any wave structure or technical analysis. However, the working scenario remains valid for now, and Trump continues to take actions that only reduce demand for the U.S. dollar. The targets for wave 3 are around the 1.3708 mark, corresponding to the 200.0% Fibonacci extension of the presumed global wave 2. Therefore, I continue to consider long positions, as the market has shown no willingness to reverse the trend yet.

Key Principles of My Analysis:

Wave structures should be simple and understandable. Complex structures are hard to trade and often lead to changes.
If there's no confidence in the market situation, it's better to stay out.
Absolute certainty in price direction doesn't exist and never will. Don't forget your Stop Loss orders.
Wave analysis can be combined with other types 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.