Elliott Wave Analysis of EURUSD – April 20th, 2026

Key Takeaways

• EUR/USD breached 1.18, first since February
• Elliott Wave suggests bullish impulse wave forming
• Market sentiment tied to potential Iran conflict de‑escalation
• Technical resistance now near 1.20, watch for breakouts
• Traders advised to monitor wave counts before adding long positions

Pulse Analysis

The euro’s climb past the 1.18 level reflects more than a technical bounce; it mirrors a broader shift in geopolitical risk. After months of heightened tension over the Iran‑Israel confrontation, diplomatic signals hint at a possible cease‑fire, easing risk‑off sentiment that had previously favored the dollar. As investors re‑price that uncertainty, the euro benefits from both a relative yield advantage and a resurgence in European economic data, positioning EUR/USD for a potential multi‑month uptrend.

Elliott Wave practitioners see the recent price action as the initiation of Wave 1 of a five‑wave bullish sequence. The pattern aligns with a prior corrective leg that concluded near 1.14, setting the stage for a higher‑degree impulse. Wave‑count analysts note that the 1.18 breakout coincides with a 38.2% Fibonacci retracement of the prior decline, a classic springboard for the next upward wave. If the wave count holds, the next target lies near the 1.20‑1.22 zone, with a potential extension toward 1.25 should momentum sustain.

For traders, the confluence of technical, wave‑theoretic, and macro factors creates a nuanced risk‑reward landscape. While the bullish wave suggests upside, the proximity of key resistance at 1.20 means a false breakout could trigger a corrective pullback. Position sizing, stop‑loss placement just below the 1.16 support, and monitoring of any escalation in the Middle East remain prudent. Ultimately, the EUR/USD trajectory will hinge on whether the Iran conflict truly de‑escalates and whether the wave structure validates, offering a compelling case for disciplined, wave‑aligned trading strategies.