EUR/USD Elliott Wave Forecast: Stuck in Sideways Correction

EURUSD completed a bullish impulse pattern on July 1 at 1.1830. The Elliott wave impulse needed 23 weeks to complete. This implies a sideways to down correction that could last 9 – 23 weeks.

At the time of this writing, EURUSD is 8 weeks into the correction. Is the bullish reversal looming nearby? Not yet.

Current Elliott Wave Analysis

It appears the decline that began on July 1 is wave 2 of a larger bullish sequence. This correction is anticipated to be a partial retracement of the H1 2025 rally. As a result, we can use the Fibonacci retracement tool to set up some initial target zones.

On the EURUSD daily price chart we can see prices bouncing from the 23.6% retracement level. The bounce was unable to press above the resistance trend line.

Therefore, it appears EURUSD may be on the front edge of pressing below the July low and targeting the next Fibonacci retracement at 38%, near 1.1170.

Regarding the Elliott wave count, the decline from July 1 appears to be taking on a double zigzag structure labeled ((w))-((x))-((y)). Last Friday’s high appears to be the end of wave ((x)) with wave ((y)) now underway to the downside.

We know from our Elliott wave studies that wave ((y)) likely takes on the shape of a 3-wave zigzag. Therefore, look for three pronounced waves to unfold from last Friday’s high.

Downside targets include 1.1030-1.1170. The upper end of the target range is the 38% Fibonacci retracement level while the low end is a 2023 trend line.

Therefore, it appears the bias is for EURUSD to decline over the coming weeks. If EURUSD is successful in reaching the target zone, then we’ll assess the maturity of the wave count and decide if a bullish reversal looms nearby.

Bottom Line

EURUSD likely finished a wave ((x)) top last Friday and is continuing its decline in wave 2. Downside targets for wave ((y)) include 1.1030-1.1170.

If last Friday’s high of 1.1743 is broken, then we’ll consider other wave count.

Key Level for Bearish Bias: 1.1743

Initial Target: 1.1170

Secondary Target: 1.030