The new week had barely begun when the dollar faced fresh reasons for decline. Over the past two weeks, there have been plenty of such reasons, but the market persisted in its desire to form at least one corrective wave according to the current wave structure. As a result, the dollar was rising — slowly and hesitantly — often causing surprise. Let me also remind you that the U.S. currency could very well continue to rise over the next month, as a typical corrective wave structure consists of at least three waves, and we have only seen one so far.

However, the news background now points not to the formation of a third corrective wave, but rather to the beginning of a new upward wave set. In brief: over the past two weeks, Trump has increased tariffs on a number of countries with which, in his view, trade negotiations are progressing too slowly. He also announced tariffs on imports of copper and pharmaceuticals. Notably, the tariff on pharmaceuticals is expected to be a staggering 200%. In my opinion, these reasons alone are enough for demand for the U.S. dollar to fall sharply again.

A new round of confrontation has also begun between Powell and Trump. Trump continues to demand Powell's resignation and is inventing ever more creative ways to pressure the Federal Reserve Chair into stepping down. But on Sunday evening, it was reported that the U.S. president now wants to impose basic tariffs of at least 15–20% on trade with the EU. That is, in Trump's view, a trade deal is still a trade deal — but Americans will still have to pay 15–20% tariffs on all European goods. On top of that, Americans will pay additional tariffs on European copper, aluminum, steel, pharmaceuticals, and automobiles. And after all this, Trump wants to sign a favorable trade agreement with Brussels.

Naturally, the EU was surprised by such a drastic move just 10 days before the negotiation deadline, and the chances of a trade deal have sharply decreased — although, in my opinion, they weren't high to begin with. Trump likely raised the stakes so that on July 31, he can announce a "one-day-only discount." Or perhaps he plans to announce another tariff hike on July 31, not effective August 1, but starting September 1. The U.S. president is becoming predictable.

Wave Structure for EUR/USD:

Based on my analysis of EUR/USD, I conclude that the instrument continues to build an upward trend segment. The wave layout still heavily depends on the news background, particularly decisions by Trump and U.S. foreign policy — and there are still no positive developments. The targets of this trend segment could reach up to the 1.25 level. Accordingly, I continue to consider buy positions, with targets around 1.1875 (which corresponds to 161.8% on the Fibonacci scale) and beyond. The failed attempt to break through the 1.1572 level (100.0% Fibonacci) indicates the market's readiness for new buying activity.

Wave Structure for GBP/USD:

The wave structure of GBP/USD remains unchanged. We are dealing with a bullish impulse segment of the trend. Under Trump, markets may still face many shocks and reversals that could seriously affect wave structures, but for now, the main working scenario remains intact. The targets of the bullish segment are now located near 1.4017, which corresponds to 261.8% on the Fibonacci scale from the presumed global wave 2. A corrective wave set is currently forming. Traditionally, it should consist of three waves, but the market may settle for just one.

Core Principles of My Analysis:

1. Wave structures should be simple and clear. Complicated formations are harder to trade and often prone to change.
2. If you're uncertain about what's happening in the market, it's better to stay out.
3. There is never 100% certainty in price direction. Always use Stop Loss protection orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.