The year 2025 has been a stormy one for the entire world, largely due to Donald Trump's return to power. The first six months of his presidency demonstrated that Trump's policies—both foreign and domestic—can yield dividends in the short term; however, in the long run, the American economy stands to lose significantly. Take the trade war, for instance. Trump will fill the US Treasury with a substantial amount of dollars, eliminate the budget deficit, and allocate more resources to programs and sectors that he personally prioritizes. Yet nearly all economists unanimously agree that Trump's policies will lead to a further increase in national debt by roughly $3 trillion. So, in the short term, Trump is doing well, but in the long term, not so much. What's the point of a budget surplus if government debt keeps rising anyway?
The same applies to Trump's other political decisions. In just a few months, the US president has managed to fall out with half the countries in the world. And these countries, lacking sufficient strength and finances, are simply afraid to respond to Trump, as the American president can, with complete "legitimacy," strike their economies. Even the European Union backed down, signing an absolutely onerous trade agreement with Trump. Yet, it's important to note that business is one thing, but friendly relations also matter greatly in global politics. For now, US leadership is undisputed, and many countries still respect it. Still, with this kind of trade policy, the direction of global economic development may start to shift. The world could learn in the coming years to get by without the American economy, which is attractive but plagued by problems.
Until recently, Canada was considered a US ally—right up until Trump imposed tariffs on it left and right. Then Trump renamed the Gulf of Mexico as the American Gulf, declared his intention to make Canada the 51st US state, demanded US control over Greenland, struck Iran, threatened to leave NATO, and is now on the verge of war with Venezuela. So, on the world political map, the US has very few friends left. Perhaps only the UK—which Trump also imposed tariffs on—can still be considered an ally.
Now, let's talk about the economy and the conflict with the Federal Reserve. How is the US economy actually performing under Trump? GDP began to grow in the second quarter thanks to import tariffs and reduced imports. But the labor market is weakening, inflation is rising, business activity is declining, and most importantly, foreign investors have started looking for alternatives to the American economy, realizing that you just can't "do business" with a president like this. At any moment, you could be branded an illegal, a fraud, or a schemer if you somehow displease the occupant of the White House. And again, don't forget about the national debt.
Wave Pattern for EUR/USD:
Based on my analysis of EUR/USD, I conclude that the instrument continues to form an upward trend segment. The wave pattern still entirely depends on the news background related to Trump's actions and US foreign policy. The targets for this trend segment can go as high as the 1.25 level. Accordingly, I continue to consider buys with targets around 1.1875, which corresponds to 161.8% Fibonacci, and higher. I believe wave 4 has been completed. Therefore, now is still a good time to buy.
Wave Pattern for GBP/USD:
The wave pattern for GBP/USD remains unchanged. We are dealing with an upward, impulsive segment of the trend. Under Trump, the markets could experience many more shocks and reversals that could significantly impact the wave picture, but for now, the main scenario remains intact. The targets for the upward move are now at approximately 1.4017. I currently believe that the downward wave 4 has ended, and wave 2 in 5 may also be complete. Accordingly, I advise buying with a target of 1.4017.
Main principles of my analysis:
- Wave structures should be simple and clear. Complicated structures are hard to trade and often change.
- If you're not confident about what's happening in the market, it's better to stay out.
- 100% certainty in the direction of movement is impossible. Don't forget about protective Stop Loss orders.
- Wave analysis can be combined with other types of analysis and trading strategies.
