Let me also highlight a few additional important points. First, the European currency is declining, but it has far fewer reasons than the pound sterling to continue falling. The pound faces several factors, including the Bank of England's weak position in combating inflation, potential budgetary issues for the UK in 2026, possible tax increases, and a potential slowdown in the labor market and economy. These factors also put pressure on the pound. The euro doesn't face similar issues.

Second, the euro hasn't lost that much over the past few days to expect that the upward trend segment is over. In part, the dollar may be getting support for the following reasons. Donald Trump hasn't introduced new tariffs or even announced plans for them for quite a while now. Trump's fight against the Fed is, at this stage, completely lost. Of course, this doesn't mean Trump couldn't announce new sanctions as soon as tomorrow. Market participants know that right now, the US President is focused on ending the conflict between Ukraine and Russia, and the White House believes that China and India are sponsoring the war in Ukraine by buying oil and gas from Russia. Therefore, these countries should stop buying from Russia. Naturally, neither Beijing nor New Delhi intends to give up access to cheap Russian oil, conveniently located nearby. Washington is offering China, India, and even the EU an alternative—American oil and gas. But, obviously, at different (higher) prices. Trump stays true to his approach—wherever it's possible to profit, profit must be made.

Since China and India are unlikely to switch to buying American oil instead of Russian, Trump wants to introduce new tariffs. However, Washington does not want to "pull the weight" on its own, so it is demanding that the European Union introduce similar sanctions. From this, I conclude that the trade war is not over, and at any moment, we could see a new confrontation between the Global West and the Global East. Thus, I cannot say that the fundamental case for further US dollar growth is strong and convincing. The dollar has short-term prospects, but in my view, the strengthening of the US currency will soon come to an end.

Wave Pattern for EUR/USD:

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.

Wave Pattern for GBP/USD:

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.

Main Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are challenging to trade and often require adjustments.
2. If you're not confident in what's happening in the market, it's better not to enter it.
3. There is and can never be 100% certainty about the direction of movement. Don't forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.