empty
16.05.2025 12:40 AM
Are Things Really So Optimistic with the Deals with China and the UK?

This image is no longer relevant

Last week, Donald Trump announced the signing of the first deal with the United Kingdom under his "America's Liberation" campaign. It was later revealed that the deal had not been signed yet, and negotiations may take several more weeks. However, it seems likely that this will be Trump's first official "victory." It's worth noting that the deal with the UK initially appeared easy to achieve. Britain and the U.S. have always maintained good relations, although that didn't stop Trump from imposing tariffs on steel and aluminum imports from the UK. Under the future agreement, tariffs on steel and aluminum may be lifted, and car import duties could be reduced to 10%.

Still, there's little reason for celebration. The deal with the UK is estimated to be worth just $6 billion for the U.S. budget, hardly a major sum. One deal has been signed, but 74 others remain. So far, the U.S. president's efficiency rate isn't very high. London has never been a major exporter of steel and aluminum, making that part of the deal largely symbolic. It's also important to note that the UK is one of the few countries in the world that buys more from the U.S. than it sells. Therefore, Washington's complaints about London were limited from the outset.

In the case of China, tariffs have been reduced, allowing trade between the two countries to resume, although in reality, trade never truly ceased. Anticipated for some time, these tariffs had prompted Chinese exporters to develop workarounds. They achieved this by routing exports to the U.S. through third countries and by increasing shipments to Southeast Asia, Europe, Africa, and Latin America. As a result, even during the month of elevated tariffs, Chinese exports did not decline; in fact, they experienced year-over-year growth.

This image is no longer relevant

Many economists note that even 30% tariffs won't be "fatal" for Chinese companies. First, re-routing through third countries remains an option. Second, demand for Chinese goods remains strong globally. This is especially true in recent years, as China has improved not just in price competitiveness but also in quality.

Wave Structure of EUR/USD

Based on the analysis of EUR/USD, I conclude that the instrument is continuing to form an upward wave segment of the trend. In the near future, the wave structure will entirely depend on the position and actions of the U.S. president. This must always be kept in mind. Wave 3 of the upward segment has begun, with targets possibly reaching as high as the 1.2500 area. Achieving these levels will depend solely on Trump's policies. At the moment, wave 2 of wave 3 appears close to completion. Therefore, I consider long positions with targets above the 1.1572 mark, corresponding to the 423.6% Fibonacci level. However, Trump could easily reverse this bullish trend downward.

This image is no longer relevant

Wave Structure of GBP/USD

The wave structure for GBP/USD has changed. We are now dealing with an upward, impulsive segment of the trend. Unfortunately, under Donald Trump, markets may experience many more shocks and reversals that don't align with wave counts or any form of technical analysis. Wave 3 of the current uptrend is ongoing, with near-term targets at 1.3541 and 1.3714. As a result, I continue to consider buying opportunities, as the market shows no interest in reversing the trend just yet.

Core Principles of My Analysis

  1. Wave structures should be simple and clear. Complex structures are hard to interpret and often involve unexpected changes.
  2. If you're unsure about the market's current direction, it's better to stay out.
  3. There is never 100% certainty in market direction. Always use protective Stop Loss orders.
  4. Wave analysis can and should be combined with other types of analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

The Dollar Flees the Battlefield

The old becomes new again. The word "recession" again trended in the Forex and other financial markets. May's U.S. Consumer Price Index (CPI) fell short of Bloomberg analysts' forecasts. Following

Marek Petkovich 00:20 2025-06-13 UTC+2

Market sells facts

Markets rise on rumors and fall on facts. For a long time, the S&P 500 had been rising due to investors' confidence in a US-China trade agreement. Once the deal

Marek Petkovich 16:53 2025-06-12 UTC+2

The Fed Is Right—It's Too Early to Cut Rates (I Expect a Decline in #SPX and an Increase in Gold Prices)

The fresh U.S. Consumer Price Index (CPI) data released on Wednesday, although below the consensus forecast, confirmed the persistence of inflationary pressure. This fully justifies the Federal Reserve's reluctance

Pati Gani 10:37 2025-06-12 UTC+2

Trump Threatens Tariffs Again – Markets React

President Donald Trump announced yesterday that he intends to send letters to trade partners within the next one to two weeks outlining unilateral tariff rates. This is ahead

Jakub Novak 09:10 2025-06-12 UTC+2

What to Pay Attention to on June 12? A Breakdown of Fundamental Events for Beginners

A significant number of macroeconomic reports are set for Thursday, but only a few are truly important. The key reports to highlight are the GDP and industrial production data from

Paolo Greco 05:52 2025-06-12 UTC+2

GBP/USD Overview – June 12: Protests Against Trump and Fed Policy

The GBP/USD currency pair continued to trade very calmly on Wednesday. Naturally, when U.S. inflation data was released, we saw a brief burst of market reaction—though it didn't last long

Paolo Greco 04:07 2025-06-12 UTC+2

EUR/USD Overview – June 12: Is There Light at the End of the Tunnel?

The EUR/USD currency pair continued to trade very calmly throughout Wednesday. The market showed no reaction whatsoever to the seemingly positive news regarding U.S.-China trade negotiations. Why? Because that positivity

Paolo Greco 04:07 2025-06-12 UTC+2

Donald Trump Plans to Suppress the Uprising

For several consecutive days, protests and unrest have continued in some major U.S. cities, sparked by Donald Trump's new immigration policy. This time, the U.S. President has decided to deport

Chin Zhao 00:35 2025-06-12 UTC+2

EUR/USD. In the Shadow of the Trade Deal: U.S. Inflation Report Pressures the Greenback

A mixed U.S. inflation report pressured the greenback. The dollar index returned to 98.00, while the EUR/USD pair refreshed its weekly high, rising to 1.1491. Additional pressure on the U.S

Irina Manzenko 00:35 2025-06-12 UTC+2

Will the Dollar Maintain the Status Quo?

To make accurate predictions about the future, one must examine the past. The more than 10% rally in EUR/USD since the beginning of the year has been driven by four

Marek Petkovich 00:35 2025-06-12 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.