EUR/USD Elliott Wave: Corrective dive underway

Executive summary

• Wave one rally from January 2025 to July 2025 appears complete.
• Decline to 1.1170 and possibly 1.08 in wave two expected.
• The support shelf near 1.1170 may contain the decline.

Sufficient evidence is in place to consider a medium-term (or longer) top in place for EUR/USD.

Medium-term structure and outlook

The weekly chart shows a rally from the January 2025 low that reached the upper channel at the July high. This upward move now appears complete, and a sideways to lower consolidation is likely underway.

On January 16 (three days after the low formed) the outlook called for “a rally lasting several months is likely to carry EUR/USD above 1.12 and possibly to 1.20.” That forecast materialized, topping at 1.1830.

With confirmation of the top, it’s now time to reverse perspective—anticipating a corrective phase to follow the strong rally.

Current Elliott wave analysis

• The six-month rally in EUR/USD appears to have ended in July 2025, and a correction is likely underway to 1.1170 and possibly lower.
• The July 1 peak is labeled wave one, with wave two (the current decline) appearing incomplete.
• Within wave one, wave ((v)) measured equal to wave ((i)) at 1.1832 (nearly matching the actual top). RSI divergence also appeared in wave ((v)) and wave ((iii)) highs, a pattern often seen in the fifth wave of Elliott impulse moves.
• The next downtrend is likely to extend below 1.1170.

The 1.1170 zone is near the 38% Fibonacci retracement level of the recent six-month rally, and forms part of a broad support shelf of broken resistance and congestion between 1.1033 and 1.1275. At the lower edge of that zone, a broken trendline dating to 2023 provides additional technical support. This area could become the launching point for the next upward move or a temporary bounce.

Bottom line

The Elliott wave impulse from January to July 2025 is likely over, and a downward correction has begun. This correction may extend to 1.1170 and potentially lower.

As the new downtrend develops, further review of wave structure will clarify where the market stands in the larger Elliott wave context and help identify strategic opportunities in EUR/USD.