The euro continues to rest on its laurels as the US dollar declines. The euro doesn't even have to do anything to attract investors and traders — market participants are fleeing the dollar like the plague, but money can't just float in the air; it needs to take the form of some currency. How many real alternatives to the dollar are there in today's world? The euro, the pound, and, at best, the yen and the franc. Thus, the main beneficiaries in 2025 are currencies that aren't even making any real effort.

Everything in the FX market now hinges on a simple question: Will the US dollar keep falling? If yes, the euro and pound will continue to rise. If the dollar begins to strengthen (which requires at least some justification), then the bull run in the euro and pound will pause — at least for a while. This is why it's so crucial for market participants to focus on how things develop in the US, rather than in Europe or the UK. Frankly, are the British and European economies really strong enough that their currencies deserve this much demand? The answer, I think, is obvious.

This doesn't mean we should ignore European news, events, or reports — but there will be few of them next week anyway. In the coming five days, Christine Lagarde will speak three times, but the European Central Bank chief may talk about far more than just monetary policy. Only ECB policy matters to the market. Last week's ECB Governing Council meeting confirmed for everyone that the rate-cutting cycle is now over. No surprise — it was widely expected.

Inflation in the EU is hovering around 2%, neither up nor down. Hence, further monetary policy changes will only happen if inflation strays from that 2% mark. If CPI rises faster than the ECB wants, expect rate hikes — bullish for the euro. If prices rise less than 2% a year, the ECB might cut rates, but the euro will not mind. In short, neither ECB actions nor Lagarde's speeches can cause the euro much trouble right now.

Wave Picture for EUR/USD

Based on my analysis, EUR/USD continues to develop its upward trend segment. The wave structure still completely depends on the news flow regarding Trump's decisions, as well as the external and internal politics of the new Administration. The wave's target may reach the 1.25 area. Given the consistent news environment, I continue to consider long positions, targeting levels near 1.1875 (the 161.8% Fibonacci level) and above.

Wave Picture for GBP/USD

The wave structure for GBP/USD remains unchanged. We are dealing with an upward, impulsive trend segment. Under Trump, markets may see plenty of shocks and reversals, which could notably impact the wave pattern, but for now, the working scenario remains intact, and Trump's policy remains unchanged. The upward trend segment's targets are near the 261.8% Fibonacci level. Currently, I expect continued growth within wave 3 of 5, aiming for 1.4017.

My Key Analytical Principles:

1. Wave structures should be simple and clear. Complex structures are harder to trade and tend to change.
2. If you are not confident about the market situation, it's better to stay out.
3. There is never 100% certainty in market direction. Do not neglect protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.