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17.06.2025 12:39 AM
Trump Wants to "Pass the Ball" to Europe

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Last week, it became known that Donald Trump is seriously considering raising trade tariffs for all countries currently engaged in negotiations with the U.S. Trump is frustrated by the slow pace of talks and the weak proposals from partners. He wants negotiations to progress faster and deals finalized as soon as possible—before the three-month period of low tariffs (introduced by the president himself) expires.

However, threatening tariffs and sanctions is one thing—actually implementing them is something else entirely. In fact, ultra-high tariffs have only been in place for very short periods. Trump has demonstrated his readiness for decisive action but has proven unwilling to follow through. According to former U.S. State Department representative for Ukraine, Kurt Volker, Trump does not intend to raise tariffs or impose sanctions. He wanted to show Europe that hesitation is unacceptable and indecisiveness is self-destructive. He made his point. Now the "ball" is in Europe's court—they must hurry with their next trade deal proposal and make it as favorable and convincing as possible.

At the same time, Volker believes that Trump wants Europe to take full responsibility for Ukraine in its military conflict with Russia. The Republican understands that achieving peace will be extremely difficult, yet he has already assumed the role of peacemaker and promised to end the conflict. If this proves impossible, he will need a "scapegoat" and someone else to blame. However, Trump does not want to abandon Ukraine openly. Many voters in the U.S. support aid to Kyiv. But at the same time, Trump does not want to provide assistance for free.

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The situation is quite complex, especially considering Trump's repeated threats to withdraw from NATO. Europe could find itself alone with Ukraine and Russia—a country it expects to face aggression from in the next five years. The threats to cut off support for Ukraine and NATO are another pressure tactic directed at Brussels in trade negotiations. The U.S. leader has started "firing on all fronts," hoping to win on at least one battlefield. He's counting on a victory in trade.

Wave Pattern for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward trend segment. The wave structure depends entirely on the news background, especially regarding Trump's decisions and U.S. foreign policy. The target for wave 3 may reach the 1.25 area. Therefore, I consider buying positions targeting around 1.1708, corresponding to 127.2% on the Fibonacci scale, and potentially higher. A de-escalation of the trade war could reverse the uptrend, but for now, there are no signs of either a reversal or de-escalation.

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Wave Pattern for GBP/USD:

The wave pattern of the GBP/USD instrument remains unchanged. We are dealing with a rising, impulsive segment of the trend. Under Trump, markets may experience many more shocks and reversals that defy wave patterns and all forms of technical analysis. However, at the moment, the active scenario remains valid, and Trump continues to do everything in his power to suppress demand for the U.S. dollar. The target for upward wave 3 is around 1.3708, which corresponds to 200.0% on the Fibonacci scale from the assumed global wave 2. Therefore, I continue to consider buying opportunities, as the market currently shows no intention of reversing the trend.

Key Principles of My Analysis:

  1. Wave structures should be simple and clear. Complex structures are hard to trade and are often subject to change.
  2. If you're unsure about what's happening in the market, it's better to stay out.
  3. Absolute certainty in market direction is never possible. Always use protective Stop Loss orders.
  4. Wave analysis can be combined with other forms of analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
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