The U.S. dollar continues to squeeze the maximum possible from every situation, every report, and every piece of news. In my opinion, if the market had not regularly disregarded U.S. news flow, the dollar in the euro currency pair would already be around 23-25 figures. However, the dollar steadfastly withstands one test after another, taking blow after blow. Sooner or later, I believe that the American currency will not cope with the pressure, and a repeat of the 2025 scenario could occur, where in four months the U.S. currency fell by 1500 basis points.

Last week, the market had every reason to significantly reduce demand for the dollar. In my opinion, two key reports—the Nonfarm Payrolls and the inflation rate—played against the U.S. currency. The market should have primarily focused on the annual revision of payrolls rather than the January value, which might be an isolated case or could be revised in March to a much lower figure (as has repeatedly happened in the last six months). The second report—inflation—indicated that the reasons for the Federal Reserve to keep the rate unchanged until June are dwindling. Consequently, in 2026, the FOMC may conduct more rounds of easing than just one or two.

Next week, there will be a few important news events in the U.S. Data will begin to flow on Wednesday: durable goods orders, building permits, new housing starts, and the Fed minutes. I believe these data may only cause a brief market reaction. On Friday, GDP reports for the fourth quarter will be released, and the second estimate may be significantly lower than the first (4.4%). On the same day, the core Personal Consumption Expenditures (PCE) index, S&P business activity indices, and the University of Michigan consumer sentiment index will also be released. This week, the news backdrop was much more significant, but the amplitude of movements left much to be desired.

Wave Picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward trend segment. Donald Trump's policies and the Fed's monetary policy remain significant factors in the long-term decline of the U.S. dollar. Target levels for the current segment of the trend may extend to the 25th figure. At present, I believe the instrument remains within the framework of the global wave 5, so I expect an increase in quotes in the first half of 2026. However, in the near term, the instrument may build another downward wave within the correction. It is advisable to search for areas and levels for new longs targeting around 1.2195 and 1.2367, which correspond to the 161.8% and 200.0% Fibonacci.

Wave Picture for GBP/USD:

The wave picture of the GBP/USD instrument is quite clear. The five-wave upward structure has completed its formation, but the global wave 5 may take on a much more extended form. We may soon observe the formation of a corrective wave set, after which the upward trend will resume. Therefore, in the coming weeks, I advise looking for opportunities for new longs. In my opinion, under Trump, the British pound has a good chance of rising to 1.45-1.50. Trump himself welcomes the dollar's decline, and the Fed has the opportunity to lower rates again at the next meeting.

Key Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often lead to changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is never 100% confidence in the direction of movement, and there can never be. Do not forget about protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.