04.09.202600:31 Forex Analysis & Reviews: Elections to Congress Are Already Lost

Americans like to live well. They are used to living well. Certainly not all Americans throw money around and can buy whatever they wish. Still, no one will deny that, in terms of standard of living, the American nation surpasses many on this planet. American life is, first and foremost, about money. And about credit. Prices in the US are high, so any increase in the cost of goods hits the middle and lower classes. That was the preamble; now the article begins.

The US Energy Information Administration reported that diesel inventories have fallen to the lowest level on record. Diesel prices have risen to their highest level since 2022 and may soon set an all-time record. The average gasoline price in the US reached $5.80 per gallon, and many experts predict further increases. Remember the panic a month or two ago in the US about fuel prices rising to $4–4.5 per gallon? Imagine the mood now among American businesses and consumers.

Experts note that fuel prices continue to rise for two reasons. First, the ongoing Middle East conflict, which blocks the Strait of Hormuz and access to Middle Eastern oil for world markets. Second, the White House's policy of ramping up energy exports. Accordingly, the global supply of petroleum products is decreasing, and US inventories are falling with it. Thus, the US face a double shortage of oil and fuel. That is why prices are rising.

Now the main question — whom to blame for this? If I approached grandmothers on a bench near the nearest house, they would probably be able to give the right answer as well. Bitcoin is out of favor right now. Everyone is talking about Trump's war with Iran. Possibly the conflict between Moscow and Kyiv also negatively affected the global oil and fuel market, since Ukrainian drones and missiles damaged many refineries in Russia. Moscow imposed a ban on fuel exports and even began importing gasoline itself. Therefore, the global energy situation is only deteriorating. It is not surprising that fuel prices are rising.

However, for us America and its problems matter, because they are reflected in the dollar's exchange rate. In my opinion, the Republican Party's chances of winning Congress were low even three months ago. Now, with gasoline costing almost $6 per gallon, they can be considered zero. At best, the Republicans will retain control of the Senate...

Wave picture for EUR/USD:

Based on my analysis of EUR/USD, I conclude that the instrument remains within a local upward segment of the trend as part of the first wave of a new global uptrend. It should be acknowledged that the trend segment beginning in January this year could take the form A-B-C-D-E. If this assumption is correct, prices will continue to decline with targets located below the low of wave C — 1.1325. However, I consider that scenario an alternative. I believe that a new upward trend segment began in June and will return the euro to the 1.20 area.

Wave picture for GBP/USD:

The wave picture of GBP/USD has become fairly clear but may be complicated. On the charts, we see a clear, complete corrective A-B-C structure. Therefore, I expect the construction of an upward set of waves. However, the current wave labeling for EUR/USD raises doubts. The euro's labeling could take a five-wave downward form, and then GBP/USD could also fall to the 1.31 area. In that case, the pound's wave labeling would also take a somewhat different form and structure. For now, this is a reserve scenario.

Main principles of my analysis:

1. Wave structures should be simple and understandable. Complex structures are hard to trade and often change.
2. If you are not confident about what is happening in the market, it is better not to enter it.
3. There is no and can never be one-hundred-percent confidence in the direction of movement. Don't forget protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.