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

EUR/USD. Analysis and Forecast

Today, the EUR/USD pair is attempting to attract buyers. Despite the European Central Bank's decision on Thursday to leave interest rates unchanged, the euro is facing headwinds due to ongoing

Irina Yanina 13:20 2025-07-25 UTC+2

No Unity of Opinion Within the ECB Yet

Yesterday, the European Central Bank kept interest rates unchanged, citing risks stemming from the trade war with the U.S., the strong euro, and rising government spending. According to Governing Council

Jakub Novak 11:59 2025-07-25 UTC+2

ECB Leaves Rates Unchanged

Yesterday, many were watching how the European Central Bank would act under current conditions, as the economy still requires stimulus, but inflationary risks prevent further easing. Following the meeting, President

Jakub Novak 11:36 2025-07-25 UTC+2

The Market Has Chosen a Win-Win Strategy

The U.S. stock market has shaken off its fears completely. The VIX volatility index has plunged to its lowest level since early February, while the S&P

Marek Petkovich 11:15 2025-07-25 UTC+2

Will Trump Succeed in Forcing Powell to Do His Bidding? (Potential for a Bitcoin Decline and a Rise in #NDX)

The U.S. president is fully implementing his aggressive policy toward everyone and everything — both in foreign and domestic affairs. While his actions toward trade partners are more or less

Pati Gani 09:57 2025-07-25 UTC+2

What to Pay Attention to on July 25? A Breakdown of Fundamental Events for Beginners

There are relatively few macroeconomic reports scheduled for Friday, but all of them are quite important. In Germany, the IFO Business Climate Index will be released — the least significant

Paolo Greco 06:43 2025-07-25 UTC+2

GBP/USD Overview – July 25: No Sign of De-escalation Yet

On Thursday, the GBP/USD currency pair pulled back slightly, but this strengthening of the dollar has no real impact on the overall picture. The British pound has corrected in recent

Paolo Greco 04:17 2025-07-25 UTC+2

EUR/USD Overview – July 25: The ECB Meeting Did Not Change the Balance of Power Between the Dollar and the Euro

The EUR/USD currency pair continued to move upward on Thursday. There were several macroeconomic events scheduled for the day, and they did provoke a small market reaction

Paolo Greco 04:17 2025-07-25 UTC+2

EUR/USD: ECB's "Hawkish Pause" and Conflicting Macroeconomic Reports

The results of the ECB July meeting provided slight support for the euro. However, contradictory macroeconomic reports and anticipation of the outcome of the US-EU negotiations played a restraining role

Irina Manzenko 00:50 2025-07-25 UTC+2

The Euro Outsmarted the "Bears"

There was no "sell the fact" reaction. One of the reasons behind the recent EUR/USD rally was the expectation that the deposit rate would be held at 2% following

Marek Petkovich 00:50 2025-07-25 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.