**EUR/USD Wave Analysis – December 18, 2025**
*Original author: Technical Analysis team, FxPro News*
The EUR/USD currency pair has continued to move within a clear downward trend, shaped largely by a visible wave structure unfolding since early Q4 2025. According to Elliott Wave principles and technical chart patterns, recent movements point towards the development of an extended impulse wave, which may see further bearish action in the sessions ahead. This analysis, based on data published by the FxPro Technical Analysis Team, outlines the core technical developments, describes the unfolding wave count, and identifies key levels that traders should monitor going forward.
**Overview of Current Market Structure**
The EUR/USD pair has exhibited consistent bearish momentum in recent trading, with price continuing to post lower highs and lower lows. Traders interpreting the movement through the lens of Elliott Wave Theory observe the following developments within the wave sequence:
– The primary bearish impulse wave, labeled Wave (3), remains active.
– Subdivision within Wave (3) is forming a smaller impulse, currently advancing through its fifth and final minor wave.
– This continuation suggests that overall downside pressure remains intact, hinting at further depreciation of the euro against the US dollar.
**Detailed Wave Count Breakdown**
The following breakdown outlines the development of the Elliott Wave structure and its implications:
– **Primary Wave (3):**
– This wave began to take shape in mid-November 2025, following a brief corrective phase associated with Wave (2).
– Wave (3) is known for being typically the most powerful and extended in a standard Elliott sequence. That characteristic appears to be honored in the current market setup.
– Indicators of strength in Wave (3) include strong bearish candles across daily charts, elevated volume during downward breaks, and a lack of any substantial retracement.
– **Subdivisions Within Wave (3):**
– Wave (i): Completed with decisive bearish momentum after the initial reversal from Wave (2).
– Wave (ii): A brief corrective phase that retraced approximately 38.2% of Wave (i), aligning with key Fibonacci resistance.
– Wave (iii): The steepest leg, exceeding the length of Wave (i) and confirming the strength of the broader trend.
– Wave (iv): A shallow and sideways correction, typically expected in strong trends. This wave displayed a triangle formation on intraday charts.
– Wave (v): Currently unfolding and nearing completion, though signs of exhaustion are beginning to form.
Each phase of the impulse is supporting the case for continued bearishness, at least until the end of the last minor wave within Wave (3). After this move concludes, the market may pause or initiate a corrective Wave (4).
**Technical Indicators Supporting the Analysis**
Alongside wave structure, several technical indicators provide confirmation of the trend and shed light on possible pivot zones.
– **Moving Averages:**
– The 50-day Simple Moving Average (SMA) remains well above the current price, indicating bearish control of the market.
– The 20-day SMA is also sloping downward, providing dynamic resistance and further emphasizing short-term selling pressure.
– **Relative Strength Index (RSI):**
– RSI levels on the daily chart are approaching oversold territory below 30, suggesting that although momentum favors sellers, a corrective bounce could be due.
– During previous phases of Wave (3), the RSI dipped into this zone without triggering a significant reversal, highlighting the strength of the dominant trend.
– **MACD (Moving Average Convergence Divergence):**
– The MACD line remains below the signal line and the zero level, reinforcing bearish momentum.
– No bullish divergence is currently observed between price and MACD, reducing the probability of an immediate reversal.
**Support and Resistance Levels**
Based on the wave count and the macrostructure on the EUR/USD daily chart, key price levels for market participants include:
– **Immediate Support:**
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