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26.09.2025 12:21 AM
In the past 5-6 days, the dollar has been resting on its laurels. As I have already mentioned, in 2025, there have been very few situations when the dollar has piqued the interest of market participants. Just a few days ago, I analyzed global factors and concluded that the dollar would continue to decline in value. However, that review was about the long term. In the short term, the factors are a bit different, and in this series of reviews, we will determine what's going on.
There are plenty of reasons for the dollar's rise over the past week if you look for them. The rise of the American currency started last Wednesday after the Fed meeting. Honestly, I wouldn't want to label that meeting as "dovish" or "hawkish" because the market has answered that question itself. It seems that market participants had expected more "dovish" statements not only from Jerome Powell (who has spoken twice in the past week) but also from half of the FOMC Committee members. Most governors do not see the need for aggressive monetary easing, except Stephen Miran. Therefore, over the next 6-12 months, we should expect steady, measured rate cuts from the Fed, which will depend solely on economic data.
The next reason for the dollar's strength in the past week is the American economy. Although the critical reports were released on Thursday, they provided substantial support for the US currency, and I can't ignore them. US GDP grew by 3.8% in the second quarter, exceeding market expectations, but I'm not entirely sure how to interpret this report.
The thing is, about a month ago, Donald Trump fired the head of the Bureau of Statistics, Erica McEntarfer. He dismissed her based on a revision of the Nonfarm Payrolls report values for the past three months, which showed a sharp decline in the number of jobs created. Over the past four months, the US economy has been creating an average of 25,000 to 30,000 jobs per month, which is relatively low. At this level of payroll, unemployment is expected to rise.
What exactly Trump didn't like is obvious. True to the best traditions of George Orwell, Trump needs to present impressive numbers so that no one inside the US can claim he is running the country poorly or that his decisions are leading to a faltering economy and worsening situation in the country. Therefore, I assume that the numbers we will see under the new Bureau of Statistics director may not always reflect reality.
Based on the analysis of EUR/USD, I conclude that the instrument is continuing to build an upward trend segment. The wave structure still entirely depends on the news background connected to Trump's decisions, as well as the foreign and domestic policies of the new White House administration. The targets of the current trend segment may reach up to the 1.25 area. Currently, the instrument is declining within a corrective wave, but the upward wave structure remains intact. Therefore, in the near term, I'm still interested in buying. By the end of the year, I expect the euro to rise to the 1.2245 mark, which corresponds to the 200.0% Fibonacci level.
The wave pattern for GBP/USD is starting to change due to the recent decline. We are still dealing with an upward, impulsive segment of the trend. However, the internal structure of this segment is becoming increasingly complex. There is no talk of building a downward trend segment yet, but the pound now looks less attractive for trading than the euro. The targets for the upward trend segment are located around the 1.4017 mark, which corresponds to the 261.8% Fibonacci level. However, it is now necessary to determine where the current downward wave will end and how the wave structure will transform.
