04.09.202500:48 Forex Analysis & Reviews: Reuters: Demand for the Dollar Will Decline in September

Many are now wondering what the dollar will face by year-end. Recall that in the first six months of 2025 and the first six months of Donald Trump's presidency, demand for the US currency steadily declined. The reasons for this have already been discussed enough, so let's focus less on the reasons and more on the outlook.

According to a Reuters survey, 80% of respondents believe that in September, the number of short positions on the dollar will increase. In the best-case scenario, this number will remain unchanged. Among the reasons for economists' concerns are potential inflation growth triggered by trade tariffs, Donald Trump's protectionist policies, tax cuts, increased spending, and repeated attempts by the president's administration to influence Federal Reserve policy.

In my opinion, the main problem for the dollar in the second half of the year will be the Fed's battle with Trump. In the first half of the year, the problem was the trade war, but in recent months, the US president has toned down his rhetoric on tariffs a bit. Instead, he has shifted all his attention from tariffs to pushing for an FOMC rate cut. At this point, he hasn't achieved any real results, so Trump is increasing pressure on the central bank.

Not only Jerome Powell, but other FOMC officials—Lisa Cook and Adriana Kugler—came into the crosshairs. Kugler has already left her post, making way for Steve Miran, who is loyal to Trump's policies. Cook, however, proved more steadfast and has filed a lawsuit against Trump's actions to remove her forcibly. Cook claims that the US president does not have the authority to fire her and, in any case, removal requires valid reasons—not an investigation into events four years ago for which Trump's team has no solid evidence.

It's also worth noting that Trump previously leveled accusations of misconduct and misallocation of budget funds against Jerome Powell. However, nothing has changed. No guilt has been proven, and I strongly doubt that any investigation against the Fed chairman is ongoing. Trump likely realized that Powell would leave in 8 months anyway, so he is currently working on other candidates for removal.

Wave Pattern for EUR/USD:

Based on my EUR/USD analysis, the pair continues to build an upward trend section. The wave structure is still entirely dependent on the news background tied to Trump's decisions and US foreign policy. The targets of the trend section can reach up to the 1.25 area. Consequently, I continue to consider buying with targets around 1.1875, which is equal to the 161.8% Fibonacci, and higher. I believe that wave 4 construction is complete. Accordingly, now is still a good time to buy.

Wave Pattern for GBP/USD:

The wave pattern for GBP/USD remains unchanged. We are dealing with an upward, impulsive section of the trend. Under Trump, markets could face many more shocks and reversals that may significantly affect the wave pattern, but for now, the working scenario holds true. The targets of the upward section are now near 1.4017. At the moment, I believe the downward wave 4 is done. Wave 2 in 5 may also be finished or close to completion. Therefore, I recommend buying with a target of 1.4017.

Basic Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often change.
2. If you are unsure about the market situation, it's better not to enter.
3. There can never be 100% certainty in the movement's direction. Don't forget stop-loss protective orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.