empty
27.06.2025 12:08 AM
Powell, Trump, and Everyone Else

This image is no longer relevant

What will change with the arrival of a new Federal Reserve Chair? This is a rather important question, and the answer to it may already have implications for the U.S. dollar and the economy. It's no secret that Donald Trump wants to have a compliant Fed Chair to influence the central bank's decisions. Trump wants to have complete control over the country and make key decisions independently. He doesn't need Congress, the Senate, or the Fed. He believes he knows better than anyone else what needs to be done.

However, such a model of governance is impossible in America. That could be a good thing. Maybe not. It's not for me to judge. During the first five months of his second term, Trump has already managed to bypass the Constitution multiple times and neglected to seek Congressional approval. He has been sued several times, and now the Democrats are once again initiating the impeachment process. But what does it matter anymore if the key decisions have already been made?

Let me remind you that, according to U.S. law, the president does not have the authority to impose global trade tariffs on entire countries. He may impose them on specific product groups (if required for national interests), yes, but not on entire nations. Additionally, under U.S. law, the president is prohibited from using the military to suppress protests or demonstrations. And he cannot unilaterally decide to launch military strikes against other nations. Nevertheless, Trump has made such decisions, and legal proceedings in the U.S. can drag on for years. So, by the time a court rules that Trump's actions were unconstitutional, he may already be retired.

This image is no longer relevant

The Federal Reserve is the only institution that does not report to Trump. However, it's worth noting that it was Trump who nominated Jerome Powell as Fed Chair during his first term. Even back then, Trump wanted a "lapdog" heading the central bank, but Powell went off-script. Legally, Trump has no right to replace the Fed Chair. So here's the question: what guarantees are there that the next Fed Chair chosen by Trump will be more loyal? Another question arises: if the 12-member FOMC makes all decisions, why does Trump believe that his "puppet Chair" will be able to make decisions independently?

Wave Pattern for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to form an upward trend segment. The wave layout still largely depends on the news background related to Trump's decisions and U.S. foreign policy, and there have been no positive developments. The targets for wave 3 could extend to the 1.25 level. Therefore, I continue to consider buying, with initial targets around 1.1708, which corresponds to 127.2% Fibonacci retracement. A de-escalation of the trade war could reverse the upward trend, but currently, there are no signs of a reversal or de-escalation.

This image is no longer relevant

Wave Pattern for GBP/USD:

The wave pattern for GBP/USD remains unchanged. We are dealing with an upward, impulsive trend segment. Under Trump, the markets may face many more shocks and reversals, which could significantly affect the wave pattern, but for now, the working scenario remains intact. Trump continues to do everything to reduce demand for the dollar. The targets for the ascending wave 3 lie around the 1.3708 mark, corresponding to 200.0% Fibonacci of the presumed global wave 2. Therefore, I continue to consider buying, as the market shows no intention of reversing the trend.

Key Principles of My Analysis:

  1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often change.
  2. If you're unsure about what's happening in the market, it's better not to enter it.
  3. There is no such thing as 100% certainty in market direction. Always remember to use protective Stop Loss orders.
  4. Wave analysis can be combined with other types of analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/JPY. Analysis and Forecast

During the European session on Monday, the GBP/JPY currency pair is approaching the 198.30 level. The pair finds some support from UK housing data: in June, house prices rose

Irina Yanina 19:40 2025-07-07 UTC+2

XAU/USD. Geopolitical Risks May Provide Additional Support to the Safe-Haven Precious Metal

Today, gold is displaying an intraday bearish tone despite rebounding from the $3300 level. Strengthening demand for the US dollar remains the primary factor pressuring gold, limiting its upward movement

Irina Yanina 19:09 2025-07-07 UTC+2

Bitcoin leads turbulent life

Beneath the calm surface of BTC/USD lie turbulent underwater currents that are reshaping the cryptocurrency market structure. Still waters run deep. On the surface, it seems that life

Marek Petkovich 15:48 2025-07-07 UTC+2

USD/JPY. Analysis and Forecast

The USD/JPY pair maintains a bullish bias, staying above the psychological level of 145.00, reflecting intraday selling pressure on the Japanese yen amid U.S. dollar strength. Investors are concerned that

Irina Yanina 12:59 2025-07-07 UTC+2

USD/CAD. Analysis and Forecast

On Monday, the USD/CAD pair continued its upward movement for the second day in a row. This rise is driven by a combination of factors. Crude oil prices initially declined

Irina Yanina 12:39 2025-07-07 UTC+2

GBP/USD. Analysis and Forecast

The GBP/USD pair began the new week attempting to hold the key psychological level of 1.3600. However, amid mixed fundamental factors, it has not been successful so far. The British

Irina Yanina 12:14 2025-07-07 UTC+2

Three days left to avert tariffs

As July 9, the deadline set by Trump, approaches, the United States main trading partners spent the weekend rushing to finalize trade agreements or lobbying for more time. Meanwhile, Treasury

Jakub Novak 11:24 2025-07-07 UTC+2

Investors see no alternatives

Uncertainty is commonly the enemy of investment, but not in 2025. A double dose of unpredictability – from geopolitics and White House tariffs – hasn't stopped the S&P 500 from

Marek Petkovich 11:17 2025-07-07 UTC+2

What to Watch on July 7th? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic publications are scheduled for Monday, and none of them are significant. Let us recall that Friday was practically a semi-holiday, as the United States celebrated Independence

Paolo Greco 08:29 2025-07-07 UTC+2

GBP/USD Overview on July 7, 2025

The GBP/USD currency pair remained nearly flat throughout Friday, as the U.S. trading session was essentially inactive on that day. There were no macroeconomic publications, and the market chose

Paolo Greco 07:25 2025-07-07 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.