The answer to this question lies in the news backdrop, Donald Trump's trade policy, overall U.S. policy, and the Federal Reserve's stance on interest rates. I completely understand many of my readers who simply want to be told the direction of movement and where to open positions. However, no one in the world can predict price movements with 100% certainty. That means every market participant and analyst makes mistakes.

What can be said about EUR/USD movements in recent weeks?

We are still seeing the formation of a corrective wave set after witnessing a classic five-wave impulse structure. Since the three-wave correction is the most common type, that's what we should expect. Typically, wave C is only slightly stronger than wave A. Therefore, the entire wave 4 may complete soon, followed by the start of a new impulse wave sequence. But what is the news backdrop saying?

As soon as Trump began signing trade agreements, the whole world saw how advantageous they are for the U.S. Demand for the U.S. dollar started rising, though I wouldn't say confidence in the dollar is returning. It's important to understand that demand for the U.S. currency largely depends on the biggest market players — particularly central banks of other countries, which build their reserves using various currencies. At the moment, the share of the dollar in those reserves is declining — precisely due to Trump's protectionist policies.

In other words, the world recognizes Trump's success, but clearly cannot rejoice with him. That's because the U.S. president achieves success at the expense of other countries, which breeds a great deal of resentment. Just today, for example, news emerged about increased tariffs for India, which purchases energy and military equipment from Russia. Trump wants to end the war in Ukraine and is prepared to impose harsh sanctions and tariffs on any countries that "sponsor" that war. According to Trump, those who buy Russian oil, gas, and weapons are aiding the conflict. Are these tariffs seen as fair by India? Unlikely. Will India, together with Russia, want to boost their dollar reserves — or will they opt to abandon dollar settlements and reserves as quickly as possible? That's a rhetorical question. So Trump's policy has two sides — at least for the dollar.

Wave Structure of EUR/USD:

Based on the current analysis of EUR/USD, I conclude that the pair continues to form an upward trend segment. The wave count remains entirely dependent on the news backdrop — specifically, Trump's decisions and U.S. foreign policy. The trend segment's targets may extend up to the 1.25 area. Accordingly, I continue to consider long positions with targets around the 1.1875 mark, which corresponds to 161.8% Fibonacci, and higher. Wave 4 may complete in the coming days, so this week it makes sense to look for new buying opportunities and closely monitor the news background.

Wave Structure of GBP/USD:

The wave pattern for GBP/USD remains unchanged. We are dealing with an upward impulse trend segment. With Trump in office, markets may face many more shocks and reversals, which could significantly affect the wave picture — but for now, the current scenario remains intact. The target for the upward trend segment is now located near the 1.4017 mark. Currently, a corrective wave structure within wave 4 is forming. According to the classic model, it should consist of three waves, and we are now observing the formation of wave C.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are harder to trade and often prone to revisions.
2. If you're uncertain about what's happening in the market, it's better not to enter.
3. Absolute certainty in price direction never exists. Don't forget about protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.