The Federal Reserve will hold its fifth meeting this year. At the previous four, monetary policy parameters remained unchanged, despite market expectations for a rate cut stretching back to last year. However, let me remind you that FOMC members regularly comment on their views of the economy and monetary policy outlook. So, no market participant can say that FOMC members gave false hope—since the start of this year, Fed officials have consistently said the base scenario for 2025 is two rounds of easing. One more rate cut is planned for next year, and another for 2027.

Also, remember that once per quarter, the so-called "dot plot" is published, which visualizes all FOMC participants' expectations. These have also consistently shown two rounds of easing for 2025. So this remains the base case and should be the basis for your assumptions.

In September, the Fed will almost certainly decide to cut interest rates by 25 basis points. Some may think this is too little, considering four months of a cooling labor market and rising unemployment. However, recall that Jerome Powell remains Fed Chair, and Donald Trump's influence on Fed decisions is limited to just 2–3 committee members. Therefore, rest assured, the decision on September 17 will not be made under political pressure.

Powell and his colleagues see the same statistics as all market participants. They cannot ignore rising inflation, so no one will rush to cut rates. The Fed has two main mandates—price stability and full employment. If the labor market needs lower rates but inflation calls for keeping them steady, they will have to balance both objectives. That's why I believe the Fed will stick to its base scenario by year-end, with exactly as many rounds of easing as planned earlier in the year. No doubt, this scenario has long been priced in, but the US dollar remains in a shaky position, so demand for it could still keep declining.

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.