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30.12.2025 12:50 AM
Trade Deal Between the USA and the EU – Fiction? Part 2

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At the same time, economists note that natural gas prices may continue to decline as the USA, Qatar, and Canada plan to increase production. Additionally, a potential resolution of the conflict between Ukraine and Russia could negatively impact prices, as Moscow might be released from a significant portion of the sanctions, many of which pertain to energy exports.

I'm reminding you that currently, India is forced to abandon Russian oil and gas due to the demands of Donald Trump. The American president believes that countries purchasing energy resources from Russia are indirectly funding its war in Ukraine. Since Trump wants to achieve a ceasefire, he is exerting pressure in every possible way, both on Moscow and on Kyiv. The only thing that varies is the levers of influence. If oil and gas prices are falling now due to strict sanctions against Russia, what will happen when the sanctions are lifted? Prices may drop even further, and the European Union will be deprived of the theoretical possibility of fulfilling the terms of the agreement.

This is where it gets interesting. Trump could already claim that Brussels is not fulfilling the deal and initiate a new trade war against the EU. If you remember, he has repeatedly stated that he would seize any excuse to start a conflict. In the situation with the European Union, he doesn't need to look for excuses. Trump sees trade wars as a way to fill the American treasury. If there is an opportunity to refill it with additional dollars, why miss such a chance? Based on this, I believe that in 2026, Trump will continue escalating the trade conflict against half of the world's countries.

Economists also point out that neither the US nor the European Union has sufficient reserves for storing extracted oil and gas. The European Union does not have the physical capability to store the volumes of gas it has committed to purchase. This further indicates the unseriousness of the trade deal. Political scientists, in turn, explain the deal as a part of political games. In their view, the European Union is trying to buy time. Donald Trump will remain the US president for another 3 years, and in the next election, a Democratic Party representative might win. It is no secret that negotiating with Democrats is much easier, so it is possible that Brussels' goal is to wait out Trump's second term and maintain good relations with the world's largest economy.

Wave Picture of EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build a bullish trend. The policies of Donald Trump and the Federal Reserve's monetary policy remain significant factors in the long-term decline of the American currency. The targets of the current section of the trend may extend to the 25th figure. The current ascending wave pattern is beginning to develop, and I would like to think that we are now observing the construction of an impulse wave set, which is part of the global wave 5. In this case, one should expect growth with targets around 1.1825 and 1.1926, corresponding to 200.0% and 261.8% by Fibonacci.

Wave Picture of GBP/USD:

The wave picture of the GBP/USD instrument has changed. The descending corrective structure a-b-c-d-e in C in 4 is complete, as is the entire wave 4. If this is indeed the case, I expect the main trend to resume construction, with initial targets around 38 and 40.

In the short term, I expected wave 3 or c to form, with targets around 1.3280 and 1.3360, corresponding to 76.4% and 61.8% of Fibonacci. These targets have been reached. Wave 3 or c is still underway, and at this time, there is a fourth attempt to break the 1.3450 level, which corresponds to the 61.8% Fibonacci. The target levels for the movement are 1.3550 and 1.3720.

Fundamental Principles of My Analysis:

  1. Wave structures should be simple and straightforward. Complex structures are difficult to trade, as they often bring changes.
  2. If there is no confidence in what is happening in the market, it is better not to enter it.
  3. There can never be 100% confidence in the direction of movement. Don't forget about protective Stop Loss orders.
  4. Wave analysis can be combined with other types of analysis and trading strategies.

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