EUR/USD Long Trade Plan: Correction Nearing Completion, Waiting for Confirmation
Published: 3rd November 2026
The Setup
The decline in EUR/USD from this year's high looks corrective rather than the start of a new downtrend. I'm watching for a move to the upside, but I need confirmation before acting.
What the Daily Chart Shows
The bigger picture is a correction. The rally from the 2022 low unfolds in two five-wave legs, which looks like an ABC correction. Waves A and C are equal in length, which is typical of a correction. If that structure is complete, the larger move from here could be lower.
The current decline looks corrective too. From the high there are five waves down, then a three-wave running flat, and now another leg lower. That fits another ABC correction rather than a fresh impulse down.
RSI divergence near the 1.0 Fibonacci extension. Price is making lower lows while RSI makes higher lows. Selling pressure is fading at a typical point for a correction to end.
The channel is holding. Price continues to respect the descending channel, which suggests the downside could be limited from here.
Fundamental Context
Macro favours the dollar. Markets price a December Fed hike at around 70% to 80%, while the ECB is holding at 2.50%.
Euro area inflation on Wednesday. A reading of 4% or higher could revive ECB hike bets and support the euro.
US jobs report on Friday. A weak number could reduce Fed hike odds and weaken the dollar. A strong number could do the opposite.
Macro vs Technical
This is where the two views don't agree. My week-ahead post has EUR/USD as a short on the macro picture. The chart now argues the decline could be ending. When the two conflict, I follow price. That's why there is no trade yet: price needs to confirm the direction before I act.
Trade Parameters
Status: Wait for confirmation. No action at this time.
Long entry: only after a five-wave impulse to the upside forms on the daily chart, then on the pullback that follows.
Stop loss: to be set below the start of that impulse.
Targets: to be set once the impulse forms.
Risk to the Trade
Price could continue lower and develop into a five-wave impulse down. I'm watching for new lows made with increasing momentum. If that happens, the corrective view is wrong, the bias turns bearish, and the macro view is confirmed.
This is not financial advice. All trades carry risk. Always do your own analysis and manage your position size.
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