US inflation for July may accelerate to 2.8% year-on-year. The corresponding report will be released tomorrow. If the forecasts are confirmed, this will mark the third consecutive month of growth in the Consumer Price Index. Consequently, market participants may conclude that there is a slight upward trend in the indicator.

I have already written earlier that US inflation will now be in conflict with the labor market. Both of these indicators influence the mood of the Federal Open Market Committee (FOMC), but now they do so in different ways. Inflation calls for maintaining the current parameters of monetary policy, while the labor market requires an urgent interest rate cut. Unfortunately, in the future, this conflict and divergence may only intensify. I have previously noted that inflation will reach its highest pace of acceleration only in the second half of 2025. Economists at Goldman Sachs are now drawing the same conclusion.

The bank stated that Donald Trump's tariffs have only just begun to be reflected in prices. According to Goldman Sachs economists, in the first months of the global trade war, the burden of tariffs fell on importers. Also, during the early months of the trade conflict, many companies stocked up on goods for several months ahead, allowing them to avoid raising prices.

Now, however, the situation is starting to change for the worse. Between April and June, American consumers paid only 22% of tariff-related costs, according to the bank's economists. However, this figure will only grow and is expected to reach 67% in the near future. Eventually, it could reach 100%, as companies are unlikely to keep covering tariffs out of their own pockets. Most likely, many firms are trying to avoid sharp price hikes to retain customers. As a result, prices are rising gradually and slowly — but they will inevitably continue to rise.

In addition, the tariffs themselves are also increasing. Trump continues to introduce new rates, and in some cases, has already imposed tariffs for the second time. Even now, the average tariff rate on imports is the highest in several decades. Considering the White House's stance, it can be assumed that tariffs will continue to rise. And along with them — inflation. What the Federal Reserve will do in this situation is difficult to imagine. Supporting the labor market now means completely ignoring inflation.

Wave Pattern for EUR/USD:

Based on the EUR/USD analysis, I conclude that the instrument continues to build a bullish section of the trend. The wave structure still entirely depends on the news background related to Trump's decisions and US foreign policy. The targets for this trend section could extend up to the 1.25 area. Therefore, I continue to consider buying with targets near 1.1875, which corresponds to 161.8% Fibonacci, and above. I assume that wave 4 construction is complete. Accordingly, now is a good time for buying.

Wave Pattern for GBP/USD:

The GBP/USD wave pattern remains unchanged. We are dealing with a bullish, impulsive section of the trend. Under Trump, the markets may face numerous shocks and reversals that could significantly affect the wave pattern, but for now, the working scenario remains intact. The targets for the bullish section of the trend are now located near 1.4017. At present, I assume that the downward wave 4 construction is complete. Therefore, I expect the upward wave sequence to continue and consider buying with a target of 1.4017.

The Main Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and are often subject to changes.
2. If there is no confidence in the market situation, it is better to stay out.
3. There can never be 100% certainty in the direction of movement. Always remember to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.