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The market is preparing to emerge from the "holidays." Donald Trump is helping it with that: at his order, the U.S. military carried out a special operation in Venezuela and captured its president, Nicolas Maduro, along with his wife. I will not hide that I did not expect the invasion to conclude so quickly; I allowed for the possibility that the new geopolitical conflict could last at least several weeks. However, the military operation was completed in a matter of hours. How the market will react to it on Monday night is not entirely clear, since the operation began and ended before the market opened. I still believe it will not go unnoticed.
However, traders would do better to shift their attention from Venezuela to the more pressing news flow. Next week will be very interesting in terms of news, and the key influence on currency rates will be economic data, not Maduro's arrest. Let's begin to sort it out. In Germany, over the next five days, reports on inflation, December business activity, retail trade, and unemployment will be released. In the European Union reports on December business activity, inflation, unemployment, producer prices and retail trade will be published. At first glance, there are many reports, and they are not trivial. However, in fact, the fate of the euro is not currently in the hands of the eurozone itself.
The market continues to make decisions based on the state of the U.S. labor market, inflation, and the prospects for Federal Reserve monetary policy. Certainly, market participants will not be able to ignore all other factors entirely. However, I remind you that in 2025 the key influencing factors were Donald Trump's policies and the Fed's policy (in relation to the Bank of England and the European Central Bank).
Therefore, the Fed's "dovish" prospects are a reason for the decline of the U.S. currency. The arrest of Maduro and all the consequences are a reason for the dollar's decline. Weak economic data are a reason for the dollar's decline. All other factors will remain in the shadows. The euro can rise without any effort, driven by strong economic reports or positive news from the EU. That is precisely why I say the fate of the euro is not in the hands of the euro.
Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward section of the trend. Trump's policies and the Fed's monetary policy remain significant factors in the long-term decline of the U.S. currency. Targets for the current trend section may extend up to the 25th figure. The current upward wave set may not be complete, but three waves have been constructed. If it develops further, one should expect growth with targets around 1.1825 and 1.1926, which correspond to 200.0% and 261.8% Fibonacci. But in the near term, a corrective wave or a set of waves may be forming.
The wave picture for GBP/USD has changed. The downward corrective structure a-b-c-d-e in C of 4 appears complete, as does the entire wave 4. If that is indeed the case, I expect the main trend section to resume with initial targets around the 38 and 40 figures.
In the short term, I expected wave 3 or c to form, with targets around 1.3280 and 1.3360, which correspond to the 76.4% and 61.8% Fibonacci levels. These targets have been reached. Wave 3 or c has presumably completed its formation, so in the near term, a downward wave or a set of waves may be observed.
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