EUR/USD: After 120 Days Up, Are We Entering a Year-Long Correction? What Market Cycles Reveal.
As EUR/USD traders digest the stunning 120-day, five-wave rally from the January 2025 lows to the July 2025 highs, the big question now is—what's next? The clues are right in front of us, and they suggest we may be headed into an extended corrective phase, one that could last until the very start of 2026.
What the Current Structure Shows
Motive Wave Complete: The impulsive surge just wrapped up a textbook five-wave move, with each leg unfolding cleanly and culminating in a July top. Motive waves like this are the engines of market trends—fast-moving, decisive, and packed with momentum.
Corrective Phase Incoming: But all trends eventually pause, and here the evidence points to a shift. Corrective waves—unlike their trending counterparts—are time-consuming, choppy, and have a tendency to frustrate impatient traders. The completed motive wave took just 120 days, but corrections often take much longer to play out. According to this chart, the probable timeline for this correction extends into December 2025, or possibly beyond.
Why the Count Is Labelled This Way
Wave Duration Clue: One of the most reliable Elliott Wave principles is that corrective phases outlast the sharp, high-energy motive moves that precede them. With the motive wave spanning four months, a comparable correction stretching into late 2025 makes perfect structural sense.
Cycle Awareness, Major Turning Points, and MACD Divergence:
Flip to the weekly turning points chart, and a deeper pattern emerges: Major EUR/USD direction changes consistently cluster around the start of a new year, with minor tops and bottoms often forming near mid-year. Over the last eight years, six out of seven major pivots have landed at those cycle pivots.
Notably, if you look at the weekly chart’s MACD, there’s now a clear bearish divergence—while price clocked new highs into July, the MACD failed to confirm, rolling over and diverging lower. This kind of momentum divergence at a major turning point is classic for trend exhaustion and aligns perfectly with the idea that a correction is not only likely, but perhaps overdue.
This powerful confluence—timing, price structure, and momentum—underscores just how much “cycle” and structure awareness can add to your trading playbook.
What to Watch Next (Trade Planning)
Timing the Correction: If the correction follows historical precedent, expect sideways or choppy price action well into Q4 2025, with the next big directional opportunity around the calendar turn into 2026.
Cycle-Based Strategies: Recognising these cycles lets you prepare for reversals, especially if price is diverging from the MACD at those major timing windows.
Structure > Prediction: The motive phase is where you ride the trend; cycles, structure, and momentum help you avoid exhaustion traps and see when patience is required.
As EUR/USD traders digest the stunning 120-day, five-wave rally from the January 2025 lows to the July 2025 highs, the big question now is—what's next? The clues are right in front of us, and they suggest we may be headed into an extended corrective phase, one that could last until the very start of 2026.
What the Current Structure Shows
Motive Wave Complete: The impulsive surge just wrapped up a textbook five-wave move, with each leg unfolding cleanly and culminating in a July top. Motive waves like this are the engines of market trends—fast-moving, decisive, and packed with momentum.
Corrective Phase Incoming: But all trends eventually pause, and here the evidence points to a shift. Corrective waves—unlike their trending counterparts—are time-consuming, choppy, and have a tendency to frustrate impatient traders. The completed motive wave took just 120 days, but corrections often take much longer to play out. According to this chart, the probable timeline for this correction extends into December 2025, or possibly beyond.
Why the Count Is Labelled This Way
Wave Duration Clue: One of the most reliable Elliott Wave principles is that corrective phases outlast the sharp, high-energy motive moves that precede them. With the motive wave spanning four months, a comparable correction stretching into late 2025 makes perfect structural sense.
Cycle Awareness, Major Turning Points, and MACD Divergence:
Flip to the weekly turning points chart, and a deeper pattern emerges: Major EUR/USD direction changes consistently cluster around the start of a new year, with minor tops and bottoms often forming near mid-year. Over the last eight years, six out of seven major pivots have landed at those cycle pivots.
Notably, if you look at the weekly chart’s MACD, there’s now a clear bearish divergence—while price clocked new highs into July, the MACD failed to confirm, rolling over and diverging lower. This kind of momentum divergence at a major turning point is classic for trend exhaustion and aligns perfectly with the idea that a correction is not only likely, but perhaps overdue.
This powerful confluence—timing, price structure, and momentum—underscores just how much “cycle” and structure awareness can add to your trading playbook.
What to Watch Next (Trade Planning)
Timing the Correction: If the correction follows historical precedent, expect sideways or choppy price action well into Q4 2025, with the next big directional opportunity around the calendar turn into 2026.
Cycle-Based Strategies: Recognising these cycles lets you prepare for reversals, especially if price is diverging from the MACD at those major timing windows.
Structure > Prediction: The motive phase is where you ride the trend; cycles, structure, and momentum help you avoid exhaustion traps and see when patience is required.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.