The wave pattern on the 4-hour chart for EUR/USD has not changed for several months, which is very encouraging. Even when corrective waves form, the structure remains intact. This allows for accurate forecasts. Recall that wave patterns do not always look textbook-perfect. Right now, however, the structure looks very good.

The upward section of the trend continues to build, while the news background mostly does not favor the dollar. The trade war launched by Donald Trump continues. His confrontation with the Fed continues. Dovish expectations are rising. Trump's "One Big Law" will increase U.S. government debt by 3 trillion dollars, while he constantly raises tariffs and imposes new ones. The market gives a very low assessment of Trump's first six months in office, even though GDP growth in the second quarter came in at 3%.

At this point, it can be assumed that wave 4 has been completed. If this is indeed the case, then the construction of impulse wave 5 has begun, with targets potentially extending toward the 1.25 level. Of course, the corrective structure of wave 4 could still evolve into a more extended five-wave form, but I proceed from the most likely scenario.

The EUR/USD rate barely moved during Wednesday. The week began under the banner of being an "important week," and market participants hoped that clarity would finally be achieved. Recall that the key question now is: "When will the Fed resume its monetary policy easing cycle?" And in my view, the answer remains unclear. According to the CME FedWatch tool, futures markets are already pricing in a 98% probability of a rate cut at the September Fed meeting. In other words, the market is convinced of a dovish decision by the regulator. So why isn't the dollar falling?

Note that the first rate cut after a 7-month pause will mark the starting point of a new monetary policy easing cycle. Few expect the Fed to cut rates once or twice and then stop. The issue now lies not only with the Fed itself, but also with Donald Trump's influence and pressure on the central bank. While a couple of months ago many doubted the U.S. president would get his way, his chances of success are now much higher.

This is because Trump has changed tactics. He is no longer pressuring Jerome Powell directly, but rather targeting individual FOMC members, reasonably assuming that their opinions matter more than Powell's. Powell, even as Fed Chair, has only one vote in rate decisions. Moreover, he must "maintain face." If he were to shift his rhetoric to a dovish stance, markets would see that Trump had won. Therefore, Powell continues to hold his ground, while other Fed governors change their positions much more easily. This means that by the end of the year, Trump may be able to sway enough FOMC members to effectively control central bank policy himself. And that would be a collapse for the dollar.

General conclusions.

Based on the EUR/USD analysis, I conclude that the pair continues building an upward section of the trend. The wave pattern still depends entirely on the news background tied to Trump's decisions and U.S. foreign policy. Trend targets may extend toward the 1.25 level. Therefore, I continue to consider buying with targets around 1.1875, corresponding to the 161.8% Fibonacci level, and higher. I assume that wave 4 has been completed. Accordingly, it is still a good time for long positions.

Key principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often change.
2. If there is no confidence in the market situation, it is better not to enter.
3. One can never have 100% certainty about the direction of movement. Always remember to use protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.