Europe Goes Against Trump

[Redator]

Just yesterday, I wrote about Trump's demand for the European Union to impose tariffs on India and China as part of his strategy against Russia. The very framing of this issue raises countless questions, but that's how things stand in Washington. Trump, who had praised Russia for several months, clearly expected that his flattery would help stop the war in Ukraine. In practice, however, the situation turned out differently, and the White House is dissatisfied. He continues to insist that Volodymyr Zelensky and Vladimir Putin must sign a peace agreement, but more than a month has passed since the historic Trump–Putin meeting in Alaska, which was supposed to kickstart negotiations. Nothing has moved forward.

Therefore, Trump decided to fire on all fronts at once. He does not want to impose sanctions on Russia, since he still calls Russia "a friend of America" and hopes Moscow's foreign policy will not align too closely with India and China. But that's precisely the direction it is taking. As a result, Trump opted to put pressure on Beijing and New Delhi, while also aiming to funnel dollars into the U.S. budget.

Trump wants both Asian powers to stop purchasing Russian energy, cutting off the Kremlin's war financing. Yet both India and China have made it clear that their trade policy cannot depend on the whims of the White House or its vision of global order. They insist on deciding for themselves where and how much oil and gas to buy for their economies. If they don't buy from Russia, then where? Trump, of course, would prefer they buy from America. Meanwhile, Europe has little appetite for imposing tariffs on India and China, especially if that means halting energy imports from Russia. Any "oil sanctions" will almost certainly be blocked by Hungary and Slovakia, which openly and directly import Russian supplies.

The European Union is considering not tariffs against India, but rather a free trade agreement. Brussels wants to expand cooperation with India, not confront it, as Trump suggests. Washington's position is, of course, convenient for itself—America is across the Atlantic, and from there it's easy to dictate terms about how others should live.

But Brussels has not lost its sense of reason or independence, and it will act in its own interest, not in the interest of U.S. politicians. The EU clearly understands that in the event of a conflict, the blow would fall on Europe, not on the United States.

Wave pattern on EUR/USD:

Based on the analysis of EUR/USD, the instrument continues forming an upward segment of the trend. The wave structure still entirely depends on the news backdrop, tied to Trump's decisions and the domestic and foreign policy of the new U.S. administration. Targets for the current trend segment may extend to the 1.25 level. Since the backdrop remains unchanged, I continue holding long positions despite the first target at 1.1875 (161.8% Fibonacci) being reached. By year-end, I expect the euro to rise to 1.2245, corresponding to 200.0% Fibonacci.

Wave pattern on GBP/USD:

The wave pattern for GBP/USD remains unchanged. The pair is in a bullish, impulsive segment of the trend. Under Trump, markets may face many shocks and reversals that could seriously affect the wave picture, but the current scenario remains intact, and Trump's policy is consistent. The targets for the bullish segment are located near the 261.8% Fibonacci level. At present, I expect the uptrend to continue within wave 3 of 5, with a target of 1.4017.

Core principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are hard to trade and often change.
2. If you're unsure of market direction, it's better not to enter.
3. There can never be 100% certainty about market direction. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

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