empty
18.06.2025 12:36 AM
What to Expect from the Fed Meeting?

This image is no longer relevant

The results of the Federal Reserve's fourth policy meeting in 2025 will be announced Wednesday evening. Some analysts have referred to this event as a "turning point," although I'm not entirely clear on what direction is expected to change. Currently, demand for the U.S. dollar depends 80% on the development of the Global Trade War and 20% on other decisions by Trump related to global politics. Therefore, decisions made by central banks (surprising as it may sound) are not all that important right now. Trump redirects capital flows and influences the economy more effectively than any central bank. Currently, in terms of "impact," Trump trails only the coronavirus, which in 2019 triggered the most severe collapse in economic growth in recent decades.

However, Trump is not a global pandemic that forced people to stay home for months, miss work, or keep children out of school. Trump came in with the slogans of a victor—even though America didn't seem to need a "winner," at least not at such a cost. As a result of Trump's policies, the market is entirely indifferent to what changes may occur in monetary policy in 2025. The European Central Bank and Bank of England could cut rates to zero, and the Fed could raise them to 10%—demand for the U.S. dollar is declining either way.

Based on the above, I believe the real question on Wednesday evening will be: will the Fed make a decision that sends the dollar to new depths? If Jerome Powell or the "dot plot" signals a dovish shift in the Fed's outlook, that would suggest two rate cuts in the second half of 2025. I'll remind you that the first dot plot of this year pointed to just such a scenario. In that case, the market would have fresh reasons to sell the dollar.

This image is no longer relevant

If the Fed takes a more hawkish stance and insists on a "wait-and-see" approach, basing decisions on further data analysis, demand for the U.S. dollar might remain stable, but there would be no case for strengthening the greenback in any scenario. Currently, justifying the appreciation of the dollar feels like writing science fiction.

Wave Structure for EUR/USD:

Based on my analysis of EUR/USD, I conclude that the instrument continues to build a bullish trend segment. The wave count still depends entirely on the news background related to Trump's decisions and U.S. foreign policy. The targets of wave 3 may extend as far as the 1.2500 level. Therefore, I consider buying with initial targets around 1.1708 (which corresponds to 127.2% Fibonacci), and potentially higher. A de-escalation of the trade war could reverse the bullish trend, but currently, there are no signs of a reversal or de-escalation.

This image is no longer relevant

Wave Structure for GBP/USD:

The wave structure of GBP/USD remains unchanged. We are observing a bullish, impulsive trend segment. Under Trump, the markets may still face a great deal of volatility and unexpected reversals that don't align with wave counts or technical analysis. Nevertheless, the active scenario remains relevant for now, and Trump continues to do everything possible to suppress demand for the U.S. dollar. The targets for bullish wave 3 are around 1.3708, corresponding to 200.0% Fibonacci of the assumed global wave 2. Therefore, I continue to consider long positions, as the market has not yet shown a willingness to reverse the trend.

Core principles of my analysis:

  1. Wave structures should be simple and easy to understand. Complex structures are difficult to trade and often lead to changes.
  2. If there's no confidence in market conditions, it's better to stay out.
  3. 100% certainty in market direction doesn't exist and never will. Always remember to use 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

GBP/USD Overview – August 13: Waiting for Friday...

The GBP/USD currency pair once again traded rather sluggishly on Tuesday. In the morning, the UK released unemployment and wage data, but the figures were far too "bland." Essentially, only

Paolo Greco 03:49 2025-08-13 UTC+2

EUR/USD Overview – August 13: Trump and China Reached an Agreement — Again, Temporarily

The EUR/USD currency pair once again traded rather calmly. While the pair is not exactly stuck in place, volatility remains low. There is no clear sideways range at the moment

Paolo Greco 03:49 2025-08-13 UTC+2

Could there have been an "error" in the inflation report?

The latest U.S. inflation report, without false modesty, was striking. Despite the highest import tariffs in the United States in at least the last 50 years, inflation is barely accelerating

Chin Zhao 00:29 2025-08-13 UTC+2

Truce Reached, but No Trade Deal

On Tuesday, the dollar received its first piece of positive news in the past few weeks. The market has already forgotten that Donald Trump skillfully signed trade agreements with Japan

Chin Zhao 00:29 2025-08-13 UTC+2

EUR/USD. What Does the U.S. CPI Growth Report Indicate?

The U.S. CPI growth report reflected stagnation in headline inflation and an acceleration in core inflation. However, the release was interpreted against the dollar — the EUR/USD pair has once

Irina Manzenko 00:29 2025-08-13 UTC+2

The Dollar Breaks the Rules

To build something new, you first have to tear everything down. This is the principle Donald Trump is following in restructuring the international trade system. As a result, principles that

Marek Petkovich 00:29 2025-08-13 UTC+2

AUD/NZD. Analysis and Forecast

The AUD/NZD pair gave up moderate intraday gains after setting a new four-week high in the 1.0982–1.0983 level, following the Reserve Bank of Australia's (RBA) monetary policy decision. Nevertheless, spot

Irina Yanina 12:29 2025-08-12 UTC+2

USD/CHF. Analysis and Forecast

On Tuesday, the USD/CHF pair drew the attention of sellers, partially halting the previous day's advance and setting a new weekly high. However, spot prices retreated only slightly from that

Irina Yanina 12:08 2025-08-12 UTC+2

Trade Truce Extended for 90 Days

Yesterday, many investors and traders breathed a sigh of relief after U.S. President Donald Trump extended the pause on raising tariffs on Chinese goods for another 90 days, until early

Jakub Novak 11:17 2025-08-12 UTC+2

GBP rises in response to UK labor market data

The British pound has recovered all of yesterday's losses against the US dollar, maintaining the potential for the bullish trend observed last week to continue. According to the latest data

Jakub Novak 10:42 2025-08-12 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.