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. Donald Trump turned out to be right, curtain down.
That could have been the end of the review, if not for one “but.” Just last week, Trump fired the Director of the Bureau of Statistics, Erica MacEntarfer, because the latest Nonfarm Payrolls data had been revised downward—quite significantly. Trump, of course, did not fire MacEntarfer for weak labor market data, but for “data falsification.” Frankly, it is hard for me to say how or why MacEntarfer could have “falsified” official reports, but the fact remains.
Let me remind you that Trump is eager to lower the Federal Reserve’s interest rate. To do that, he would either need to replace Powell and half the FOMC, or “slightly lower” labor market data, or “slightly lower” inflation data. On Tuesday, a new inflation report was released, showing no acceleration in price growth. Admittedly, everything that follows is only a supposition without any proof or grounds. But the acting Director of the Bureau of Statistics might well have thought that reporting the real (for example, high) inflation data could cost him his position as well.
Moreover, Trump has already decided on the new Bureau of Statistics director—E.J. Antoni, chief economist at The Heritage Foundation. “Our economy is thriving, and Antoni will ensure honest and accurate figures. Mr. Antoni will do an excellent job,” Trump wrote on his own social network, Truth Social. Don’t you think the phrase “ensure honest and accurate figures” sounds somewhat ambiguous? I remind you that many economists are concerned that U.S. statistics will now depend on Trump’s preferences.
Perhaps the latest inflation report is completely accurate and correct, but in the future, I will have serious doubts about any positive data on the U.S. economy.
Wave Pattern for EUR/USD
Based on my analysis of EUR/USD, I conclude that the instrument continues to build an upward section of the trend. The wave structure still entirely depends on the news background related to Trump’s decisions and U.S. foreign policy. The targets for this section of the trend may extend up to the 1.25 area. Therefore, I continue to consider buying positions with targets around 1.1875 (which corresponds to the 161.8% Fibonacci level) and higher. I assume that the formation of wave 4 has been completed. Accordingly, now is a good time for buying.
Wave Pattern for GBP/USD
The wave pattern for GBP/USD remains unchanged. We are dealing with an upward, impulsive section of the trend. Under Trump, the markets may face many more shocks and reversals, which could significantly affect the wave structure, but at the moment, the working scenario remains intact. The targets for the upward section of the trend are now located near 1.4017. At present, I assume that the formation of the downward wave 4 has been completed. Therefore, I expect the upward sequence of waves to continue, and I am considering buying positions with a target of 1.4017.
Key Principles of My Analysis
- Wave structures should be simple and clear. Complex structures are difficult to trade and are often subject to changes.
- If there is no confidence in what is happening in the market, it is better to stay out of it.
- 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.
