EUR/USD Outlook: Bullish Sentiment Ahead

The EUR/USD exchange rate is poised for an upward trajectory, driven by several key factors,
here is how:

1. Peace Dialogue Between the US and Russia
The initiation of peace talks between the United States and Russia marks a significant geopolitical development. This aligns with President-elect Donald Trump's campaign promise to foster peace before taking office. Improved relations could enhance global market stability, supporting the euro against the dollar.

2. Positive Impact on Euro Area Stocks
Peaceful relations are expected to benefit the euro area, particularly as battered eurozone stocks may begin to outperform over the next six months. A recovering stock market can bolster investor confidence, drawing capital into the eurozone and strengthening the euro.

3. Technical Analysis: Elliott Wave Theory
From a technical standpoint, Elliott Wave Theory suggests we are currently experiencing a regular flat correction. In this scenario, wave B has not breached the impulsive wave, while wave C has dipped below wave A, indicating potential for a bullish reversal. This technical pattern supports the notion of an upward movement in the EUR/USD pair.

4. Declining Interest Rates
With interest rates trending downward, we can expect a stronger euro as lower rates typically weaken the dollar. This shift could lead to increased capital inflow into the eurozone, further enhancing the euro's value.

5. Currency Strategy Under Trump
President Trump has historically advocated for a weaker dollar to stimulate exports. A devalued currency can make US goods more competitive internationally, suggesting that a weaker dollar could be a strategic goal of his administration. This dynamic would likely favor the euro in the EUR/USD pair.

Conclusion: Long Position on EUR/USD
Given these factors, I am taking a long position on EUR/USD, anticipating a rise to 1.12 within the next three months and potentially reaching 1.20 by the end of 2025. While the market can be unpredictable, the current indicators suggest a favorable outlook for this trade.