As I mentioned in the previous review, the European Union has tools to respond to Donald Trump. European officials' reluctance to enter into a full-scale conflict is understandable. First, why go to war if it won't benefit anyone? Second, Europeans are accustomed to a calm, comfortable, and, above all, orderly way of life. They don't need new economic shocks, inflation, or a downturn. However, in my view, if war becomes inevitable, Europe will fight.

This sentiment was recently expressed in Germany and then supported by many countries within the bloc. European officials consider the likelihood of reaching a trade agreement with the U.S. before August 1 to be extremely low. Starting next month, Trump intends to raise tariffs on EU imports to 30%. And that's not a final figure, since the U.S. president changes his mind constantly. Before August 1, 30% could easily become 50% or even 100%. On August 1, they could drop to 15% during a new "grace period," only to rise to 300% later. In short, Trump could change the tariffs daily, since they're merely a tool for pressuring his trade partners.

Frankly, it's surprising that Europe still doesn't seem to understand this, continuing to seek an agreement with an increasingly aggressive Trump. However, every patience has its limit. Brussels is preparing an "anti-coercion package" in case no deal is reached and Trump imposes higher tariffs. The package would include export and import restrictions, limited access for U.S. companies to the European market, and restrictions on direct U.S. investment in the European economy.

The EU is ready to take steps to "counter active coercion." Notably, these measures are likely to extend beyond reciprocal tariffs and include other steps that could lead to further confrontation. However, if Trump understands no other language but force, how else can one negotiate with him? European officials have stated that retaliatory measures will be proportional to the damage caused by Trump's tariffs. Approving the "anti-coercion package" could take time—every decision in the EU requires agreement from all 27 member states. The key point is that the EU has the tools to counter Trump. It seems we are headed for a new escalation of the trade war.

Wave Analysis of EUR/USD:

Based on the EUR/USD analysis, I conclude that the instrument continues to build a bullish trend segment. The wave structure still heavily depends on news related to Trump's decisions and U.S. foreign policy—and so far, no positive developments have emerged. The targets of the trend segment could extend up to the 1.25 area. Therefore, I continue to consider long positions with targets around 1.1875 (161.8% Fibonacci) and higher. The failed attempt to break through 1.1572 (100.0% Fibonacci) suggests that the market is ready for new purchases of the instrument.

Wave Analysis of GBP/USD:

The wave structure of GBP/USD remains unchanged. We are dealing with a bullish, impulsive trend segment. With Donald Trump in office, markets may face numerous additional shocks and reversals that could significantly impact the wave structure. But for now, the working scenario remains intact. The targets of the bullish trend segment are now near 1.4017, which corresponds to 261.8% Fibonacci of the presumed global wave 2. A corrective wave set is currently forming. Typically, this consists of three waves, but the market may settle for just one.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are hard to trade and often involve changes.
2. If you're uncertain about what's happening in the market, it's better to stay out.
3. You can never be 100% sure about market direction. Don't forget to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.