The U.S. dollar will once again capture all of the market's attention. In my view, the market will be "digesting" Friday's message from Jerome Powell for quite some time, because interpreting it unambiguously is extremely difficult. On the one hand, Powell allowed for a rate cut, though he has never rejected the idea that policy easing would resume at some point. On the other hand, he pointed to rising inflation and suggested that Trump's tariffs would continue to push consumer prices higher. In other words, in a single speech, the Federal Reserve Chair said both "yes" and "no."

It is also worth noting that the FX market sharply reduced demand for the U.S. dollar, while the futures market lowered the probability of a September rate cut from 90% to 75%, as well as the likelihood of two rounds of easing before year-end. Thus, the market has started to doubt the dovish scenario more, not less.

Also, keep in mind that Powell's stance is not the only one that matters. In recent weeks, at least four Fed governors have said they are ready to vote for easing, while several others have spoken strongly against a rate cut in September. Therefore, the September 17 rate vote could turn into a real "battle of opinions," with an outcome that cannot be predicted. What is clear is that the FOMC is firmly split into two camps. Which side ultimately gains the majority will be determined by the upcoming reports on inflation, unemployment, and the labor market.

In the U.S., reports are due on durable goods orders, Q2 GDP, the Personal Consumption Expenditures (PCE) price index, and the University of Michigan Consumer Sentiment Index. Naturally, weak U.S. economic data would trigger fresh dollar sell-offs. Even the GDP report won't save the U.S. currency, since the second estimate is only an intermediate step between the "first impression" and the "final diagnosis."

Wave Pattern for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues building a bullish trend segment. The wave structure remains entirely dependent on the news background tied to Trump's decisions and U.S. foreign policy. Targets for the trend segment may extend up to the 1.25 area. Accordingly, I continue to consider long positions with targets around 1.1875, which corresponds to the 161.8% Fibonacci level, and higher. I assume that wave 4 has been completed. Thus, it is still a good time to buy.

Wave Pattern for GBP/USD:

The wave structure for GBP/USD remains unchanged. We are dealing with an upward, impulsive trend segment. Under Trump, markets may face many more shocks and reversals, which could significantly affect the wave picture, but for now, the working scenario remains intact. Targets for the upward trend segment are now around 1.4017. At this time, I assume that the downward wave 4 has been completed. Wave 2 of 5 may also be near completion. Therefore, I recommend buying with a target of 1.4017.

Basic Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often require adjustments.
2. If there is no confidence in what is happening in the market, it is better to stay out.
3. Absolute certainty in market direction does not exist and never will. Always remember to place protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.