How Long Will the American "Shutdown" Last? Part 3

Ben Graham · Novembro 3

As part of the campaign to force Democrats into concessions, Donald Trump has already attempted to dismiss 4,000 federal employees. The US President continues to blame Democrats for the halt in government operations, although any person with a basic understanding of the issue can see that the problem does not lie with the Democrats. Fortunately, the attempt at mass dismissal failed. Federal Judge Susan Illston blocked Trump's attempt to fire the 4,000 employees, siding with the unions that brought a lawsuit against the president's actions. Judge Illston also indicated that any future attempts by the president to fire anyone without just cause would have the same outcome.

I want to remind you that in the US, a person cannot be dismissed just like that, at will. This is why Trump's attempt to fire Fed Governor Lisa Cook was unsuccessful. In court, Trump's lawyers could not even present substantial evidence of Cook's wrongdoing, which led the president to fire her via social media without any authority to do so. The court quickly reinstated Cook to her position.

Therefore, at this moment, Trump is losing the battle against the system. Of course, the president has no intention of surrendering, and 20 more votes can be held in the Senate. US Treasury Secretary Scott Bessent described the Democrats' behavior as "shameful," reminding that if the "shutdown" continues, the American government will be unable to pay military salaries. Bessent calls on moderate Democrats to "become heroes" and approve the government funding bill. Overall, the situation has become painfully banal. Democrats blame Republicans, Republicans blame Democrats, and work is stalled.

Based on all of the above, I believe that the "shutdown" in America could last another month, as there are no deadlines associated with it. The "shutdown" will end when one of the parties shows weakness or feels that prolonging the pause will negatively impact their political ratings. As for the dollar... Demand for the US currency continues to increase under quite contradictory circumstances. I am currently paying closer attention to wave analysis, which again suggests an imminent end to the declines in the EUR/USD and GBP/USD instruments. I still cannot find any economic grounds for strengthening the American currency.

Wave Analysis of EUR/USD:

Based on the analysis of EUR/USD, the instrument continues to build an upward trend section. Currently, the market is in a pause, but Donald Trump's policies and the Fed's remain significant factors in the future decline of the American currency. The targets for the current section of the trend may extend up to the 25 level. We are currently observing the construction of corrective wave 4, which takes on a very complex and elongated appearance. Therefore, in the near future, I still consider only buys, as any downward structures are corrective. The latest structure – a-b-c-d-e may be nearing its completion.

Wave Analysis of GBP/USD:

The wave pattern of the GBP/USD instrument has changed. We continue to deal with an upward, impulsive section of the trend, but its internal wave structure is becoming more complex. Wave 4 takes on a three-wave appearance, and its structure is significantly more elongated than that of wave 2. Another downward corrective structure is close to completion. I continue to expect the main wave structure to resume its development, with initial targets around the 38 and 40 levels, and I believe this could occur as early as the beginning of November.

Key Principles of My Analysis:

Wave structures must be simple and comprehensible. Complex structures are difficult to trade and are often subject to change.
If there is no confidence in market movements, it is better not to enter the market.
There is no such thing as 100% certainty in directional movements, and there never can be. Always remember to use protective stop-loss orders.
Wave analysis can be combined with other types of analysis and trading strategies.

The material has been provided by InstaForex Company - www.instaforex.com