Forex Analysis & Reviews: 19.05.2025 - EUR/USD Analysis on May 19,...

InstaForex - Official partner of Dragon Racing

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex Loprais Team - Official participant of the Dakar rally

19.05.2025 06:26 PM

EUR/USD Analysis on May 19, 2025

The wave pattern on the 4-hour chart has transformed into a bullish structure and remains as such. I believe there is no doubt that this transformation occurred solely due to the new U.S. trade policy. Until February 28, when the sharp decline of the U.S. dollar began, the entire wave structure looked like a convincing bearish segment, forming a corrective wave 2. However, weekly announcements by Trump regarding various tariffs did their job. Demand for the U.S. dollar plummeted, and now the entire trend segment that began on January 13 has taken on a bullish impulsive form.

The market didn't even manage to construct a convincing wave 2 within this trend segment. We only saw a small pullback, which was smaller than the corrective waves in wave 1. However, the U.S. currency may continue to decline unless Donald Trump reverses the course of his trade policy by 180 degrees — something he already demonstrated he is capable of on Monday.

The EUR/USD pair rose by 100 basis points on Monday even before the U.S. session opened. Some attributed the latest drop in the dollar to the elections in Poland and Romania, where pro-European candidates won or are leading. But I am almost certain that it all came down to a piece of news that six months ago the market would not have even noticed.

Moody's Ratings downgraded the U.S. credit rating from the highest grade to AA1. On the surface, this may seem like a mere formality. But the market reacted sharply to this development because it marks yet another deterioration in the U.S. economy within just four months of Donald Trump's presidency. Right now, the market doesn't need a major reason to sell the dollar — any excuse will do. Significant reasons are only needed to justify buying the dollar. And even when such reasons appear, they cannot outweigh the prevailing uncertainty and doubts about the future of the U.S. economy under President Trump.

Think about it: tariffs for all countries on Trump's list have been reduced to minimum levels. Generously, Trump gave countries three months to submit their trade deal proposals, after which Washington would amend, approve, or reject them. So at this point, the trade war can be said to be in the "eye of the hurricane." But the market refuses to make long-term decisions, knowing full well that at any moment the calm can give way to another storm. Given this, it's psychologically much easier to hit the "buy" button than the "sell" button.

Key conclusions

Based on the analysis of EUR/USD, I conclude that the instrument is continuing to build a bullish trend segment. In the near term, the wave pattern will depend entirely on the stance and actions of the U.S. president — something to keep in mind at all times. Wave 3 of the bullish segment has begun to form, with targets that may extend as far as the 1.25 level. Achieving those targets depends solely on Trump's policies. At this point, it is possible that wave 2 of 3 has been completed. Therefore, I am considering long positions with targets above 1.1572, which corresponds to 423.6% on the Fibonacci scale. Keep in mind, however, that a de-escalation in the trade war could reverse the uptrend — although currently, there are no wave-based signals of such a reversal.

On the higher wave scale, the pattern has shifted to bullish. A long-term upward wave sequence is likely, but news flow from Donald Trump has the potential to turn everything upside down once again.

Core principles of my analysis:

Wave structures must be simple and clear. Complex structures are hard to trade and often result in pattern changes.
If there is uncertainty in the market, it's better to stay out.
Absolute certainty in market direction is impossible. Always use Stop-Loss protection.
Wave analysis can be combined with other forms of analysis and trading strategies.

You have already liked this post today

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