empty
14.07.2025 12:41 AM
U.S. Dollar. Weekly Preview

This image is no longer relevant

In the upcoming week in the U.S., reports on inflation and industrial production will be released, along with a few other moderately interesting indicators. The most important one is undoubtedly inflation. However, in my opinion, this indicator currently does not influence the Federal Reserve's monetary policy. In recent months, Jerome Powell and many of his colleagues on the FOMC have repeatedly stated that they are not ready to make any radical decisions regarding interest rates in the near future. The Fed continues to adopt a wait-and-see approach because no one in the world right now can say with certainty what the final import tariffs to the U.S. will be, which countries will sign trade deals, and which other sectors Donald Trump will decide to impose tariffs on. Let me remind you that tariffs are already in place on automobiles, steel, and aluminum. Starting August 1, new ones will apply to copper and pharmaceuticals. These tariffs are not going away.

Therefore, whether U.S. inflation rises or falls, it hardly matters. The Fed still plans to implement two rounds of policy easing in 2025, and one round each in 2026 and 2027. Of course, next year, when Powell retires, the situation may change slightly, but not within the coming year. As of now, only two out of 19 FOMC members support easing at upcoming meetings. And these two are proteges of Trump, as dramatic as that may sound. One of them is even a candidate to become Fed Chair.

This image is no longer relevant

In my opinion, even the new tariffs imposed by the U.S. president will not significantly impact the dollar exchange rate, since the market has demonstrated this week that it is focused on building a corrective wave structure. However, this outlook carries risk. No one knows when the majority of market participants will decide that the current correction is enough. After all, the news backdrop hasn't started supporting the U.S. dollar. Therefore, the decline in the dollar may resume sharply and unexpectedly for many. I am not currently considering short positions on EUR/USD or GBP/USD.

Wave Pattern for EUR/USD:

Based on the EUR/USD analysis, I conclude that the instrument continues to build a bullish trend segment. The wave pattern still entirely depends on the news backdrop related to Trump's decisions and U.S. foreign policy, and there are still no positive changes.

The targets of the trend segment may extend to the 1.2500 area. Therefore, I continue to consider buying, with targets around 1.1875, which corresponds to 161.8% Fibonacci. A corrective wave structure is expected to develop soon, so new euro purchases should be considered after its completion.

This image is no longer relevant

Wave Pattern for GBP/USD:

The wave pattern of the GBP/USD instrument remains unchanged. We are dealing with a bullish, impulsive trend segment. Under Trump, the markets may face many more shocks and reversals, which could seriously affect the wave structure, but for now, the working scenario remains intact.

The targets of the bullish trend are now located around 1.4017, which corresponds to 261.8% Fibonacci of the assumed global wave 2. A corrective wave structure is now presumably forming. Classically, it should consist of three waves.

Core Principles of My Analysis:

  1. Wave structures should be simple and clear. Complex structures are hard to trade and often shift.
  2. If you're uncertain about market conditions, it's better to stay out.
  3. There is never 100% certainty in market direction. Always use protective Stop Loss orders.
  4. Wave analysis can be combined with other forms of analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Alexander Dneprovskiy
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

XAU/USD. Analysis and Forecast. Gold is supported by moderate USD weakness and trade-related uncertainty

Today, gold is trading higher, remaining within a sideways trend. Late Thursday, Federal Reserve official Christopher Waller stated that rising risks to the economy could justify a key rate

Irina Yanina 19:15 2025-07-18 UTC+2

AUD/USD. Analysis and Forecast

Today, the AUD/USD pair climbed above the key psychological level of 0.6500, attempting to confirm its recent positive momentum. The main driver behind the Aussie's rise is the weakening

Irina Yanina 13:49 2025-07-18 UTC+2

USD/CAD. Analysis and Forecast

Today, Friday, the USD/CAD pair is pulling back from a three-week high near 1.3775 recorded yesterday. At the moment, prices are trading slightly below the 1.3730 level, showing a modest

Irina Yanina 13:38 2025-07-18 UTC+2

The European Central Bank May Postpone Its Rate Cut Until December

While the euro attempts to stage a correction against the U.S. dollar, a survey of economists suggests that the European Central Bank may delay its final interest rate cut until

Jakub Novak 11:37 2025-07-18 UTC+2

Powell Responds to White House Criticism

Lately, Federal Reserve Chair Jerome Powell has faced increasing pressure, coming under fire from lawmakers, the White House, and U.S. President Donald Trump. In a letter sent on Thursday, Powell

Jakub Novak 11:26 2025-07-18 UTC+2

The U.S. Begins Regulating the Digital Currency Market (Potential for a Correction in Bitcoin and EUR/USD)

The U.S. House of Representatives has passed bills establishing the first federal framework for dollar-backed stablecoins and setting regulations for other digital currencies. The idea of regulating the cryptocurrency market

Pati Gani 09:28 2025-07-18 UTC+2

The Market Favors a Weak Dollar

What could be better for the S&P 500 than a Federal Reserve rate cut amid a still-strong economy? A series of positive labor market and retail sales data, combined with

Marek Petkovich 09:28 2025-07-18 UTC+2

What to Pay Attention to on July 18? A Breakdown of Fundamental Events for Beginners

Several macroeconomic reports are scheduled for release on Friday, but none of them are of major importance. The only noteworthy release is the University of Michigan Consumer Sentiment Index

Paolo Greco 06:13 2025-07-18 UTC+2

GBP/USD Overview – July 18: Is the Market Tired of the Dollar and Trump?

The GBP/USD currency pair once again leaned toward decline on Thursday. After the British pound strengthened on Wednesday evening following another report about Powell's dismissal, the dollar quickly recovered. However

Paolo Greco 03:56 2025-07-18 UTC+2

EUR/USD Overview – July 18: Trump Will Keep Trying to Fire Powell for Another Year

The EUR/USD currency pair continued its steady decline throughout Thursday. As a reminder, the forex market experienced an "explosion" on Wednesday evening. Donald Trump once again attempted to either fire

Paolo Greco 03:56 2025-07-18 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.