The international news agency Reuters surveyed currency strategists to find out what the future holds for the U.S. dollar. As the survey shows, one doesn't need to be a strategist at a major bank to draw an obvious conclusion. Out of 42 experts polled, 26 believe that short positions on the dollar will either remain at current levels or increase. The dollar is expected to continue weakening in the foreign exchange market due to the likely loss of independence of the Federal Reserve, declining trust in official statistics following Trump's dismissal of Bureau of Statistics Director Erica McEntarfer, the growing U.S. national debt, and the rising probability of Fed rate cuts by the end of 2025 and throughout 2026.

These four key reasons for a potential new decline of the U.S. currency have been repeatedly highlighted in recent days. And many analysts agree with this view. The U.S. national debt is expected to grow due to Trump's "One Big Beautiful Bill," which not only entails a reduction of certain (insignificant) taxes but also a significant increase in defense and anti-immigration spending. The Fed may lose its independence this year if governors continue to leave the FOMC at the current pace. Trump would then appoint "his people" to the vacant seats, and sooner or later, the balance of power will tilt toward the doves. The U.S. Bureau of Statistics might as well be renamed the Ministry of Truth (in reference to George Orwell's 1984)—a truth tailored to suit Donald Trump.

Markets are also concerned about potential divisions within the FOMC. If the new Fed chair is a clear advocate of dovish policy, many current board members may oppose him, as it will be obvious what political direction is influencing decisions. Consequently, more FOMC members may resign over disagreements with the new president or due to pressure from Trump. Let me remind you that the Fed makes interest rate decisions unanimously in 90% of cases. This indicates that the entire FOMC operates under the same principles and mandates, which leave little room for ambiguous interpretation. However, the situation has recently changed—Michelle Bowman and Christopher Waller have voted for rate cuts at two consecutive meetings.

Some of the Reuters-surveyed currency strategists believe that demand for the U.S. dollar could increase in the coming months, but even they hold negative long-term forecasts.

Wave Structure for EUR/USD:

Based on the conducted analysis, I conclude that EUR/USD is continuing to build a bullish trend segment. The wave layout remains entirely dependent on the news background tied to Trump's decisions and U.S. foreign policy. The targets of this bullish wave segment could extend up to the 1.2500 area. Therefore, I continue to consider buying with targets near the 1.1875 mark, which corresponds to the 161.8% Fibonacci level and beyond. Wave 4 is presumably complete. Therefore, now is a good time to buy.

Wave Structure for GBP/USD:

The wave structure for GBP/USD remains unchanged. We are dealing with a bullish, impulsive segment of the trend. Under Trump, markets may face many more shocks and reversals, which could significantly impact the wave structure. However, at the moment, the working scenario remains intact. The targets for the bullish wave segment are now located around the 1.4017 level. I currently assume that the corrective wave 4 has been completed. Therefore, I expect the upward wave series to resume and continue considering long positions with a target of 1.4017.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are hard to trade and frequently shift.
2. If you're uncertain about the market situation, it's better not to enter.
3. Absolute certainty in market direction never exists. Don't forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.