As a cherry on top, the potential conclusion of the conflict in the Middle East looms. We have already established that market participants generally finished pricing in this factor around a month ago. However, a final truce and the reopening of the Strait of Hormuz would completely alleviate market tensions. Consequently, demand for risk assets would increase, and the Middle East would begin to recover from the war. Investments would flow into the region, and demand for US currency would decrease. Therefore, in the event of signing a memorandum, a framework agreement, or a full-fledged deal, I expect the US dollar to fall further across the market and return to its lowest levels in the last four years.
However, this reality will not cause anyone in the White House to worry. Donald Trump still sees the recipe for shifting the US trade balance to a positive balance in trade deals signed with partners at gunpoint, through the depreciation of the dollar (the cheaper the dollar, the cheaper American goods, raw materials, and energy are on global markets), and through trade tariffs (which reduce import volumes while theoretically keeping exports unchanged). Therefore, for the White House, the lower the US currency falls, the better.
I also want to address the US stock market, which continues to grow rapidly. On one hand, this factor increases demand for the US dollar as many investors want to join the "bull rally." On the other hand, many economists have pointed out for several months, if not years, that there is a "bubble" that continues to inflate. The growth of the US stock market in 2025-2026 was driven by advances in AI and by massive investments from companies in this segment. However, a "bubble" cannot inflate forever. Sooner or later, it will burst, and investments will flow to other markets.
Based on everything discussed in these four reviews, I believe the US currency will continue to decline over the next two to three years. Real-life events (such as geopolitical ones) indeed provide temporary support for the dollar, but only for short periods. Of course, if Donald Trump continues military interventions in 2026, the market will repeatedly turn to the US currency as a "safe haven." But all of this is merely a delay in a new decline.
Wave Picture of EUR/USD:Based on the analysis of EUR/USD, I conclude that the instrument remains within the upward segment of the trend (as shown in the lower image), and in the short term, is in a corrective structure. The corrective wave set looks quite complete and may take on a more complex, elongated form only if the geopolitical background in the Middle East does not worsen. Otherwise, a new downward segment of the trend may begin from the current positions. We have seen a corrective wave, and I expect a new upward movement from current levels with targets around the 19 figure.
The wave picture of the GBP/USD instrument has become clearer over time, as I anticipated. Now we see a clear five-wave upward structure on the charts that may complete soon. If this is indeed the case, we should expect the formation of a corrective wave set. Therefore, the basic scenario for the coming days is an increase towards the 37 figure. What happens next will depend on geopolitical factors. Following an impulsive downward structure, we have seen an impulsive upward movement, suggesting the instrument may be at the very beginning of an upward segment of a larger trend.
Main Principles of My Analysis:Wave structures should be simple and clear. Complex structures are difficult to interpret and are often subject to change.If there is no certainty about what is happening in the market, it is better not to enter at all.There can never be 100% certainty about the direction of movement. Always remember to use protective stop-loss orders.Wave analysis can be combined with other types of analysis and trading strategies.