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18.02.2025 12:21 PM
Markets Likely to Remain in Sideways Ranges for Some Time (Potential Decline in EUR/USD and GBP/USD)

Markets continue to fluctuate back and forth amid Donald Trump's active domestic and foreign policies, which affect not only geopolitical and social issues but also economic concerns both within the U.S. and globally.

Observing market movements, it is likely that this situation will persist for some time until investors see stabilization in the resolution of the Ukraine issue, U.S. trade policies under the 47th president, and the broader direction of the American economy.

Yesterday's statements from Federal Reserve officials Christopher Waller, Patrick Harker, and Michelle Bowman were particularly significant. These FOMC representatives essentially signaled that the Fed should refrain from resuming rate cuts as long as inflation remains elevated. Waller suggested holding off on rate reductions, independent of recent economic data, unless inflation mirrors last year's decline toward the 2% target. Bowman also called for patience, urging the Fed to wait for further confirmation that inflation is genuinely moving toward 2%. Harker echoed these sentiments, advocating for maintaining interest rates at current levels while describing the U.S. economy as strong.

Market participants, now understanding the Fed's stance, anticipate the release of the FOMC meeting minutes this week to gain further clarity on the future of interest rate policy.

Last week, the U.S. dollar faced pressure due to mixed economic data from the U.S. and easing concerns over Trump's aggressive tariff policies on imports.

U.S.-Russia Talks Remain a Key Focus

Global attention remains on the ongoing negotiations between the U.S. and Russia regarding Ukraine. Should these talks move toward a final peaceful resolution, particularly one favorable to Russia, we could see:

  • A continued recovery in the Russian stock market
  • Strengthening of the ruble against major currencies
  • The potential renewal of economic ties between Russia and the U.S., which could pave the way for Europe and other pro-Trump regions to follow suit.

This would likely trigger a strong bullish signal for stock indices, oil prices, and the U.S. dollar. However, gold prices could decline sharply, as the resolution of the Ukraine crisis would remove a major source of geopolitical risk.

While this scenario represents the most optimistic outcome, even a partial realization of such developments could serve as a catalyst for these expected market shifts.

What to Expect in Markets Today?

The primary market focus today will be on Donald Trump's scheduled speech. His remarks could provide either a positive or negative impulse for financial markets. However, with a high degree of likelihood, sideways trading will continue, maintaining the current market dynamic of consolidation.

Market Forecast for the Day:

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This image is no longer relevant

EUR/USD

The pair is trading slightly above the 1.0455 support level. A break below this level could lead to a further decline toward 1.0390, driven by dollar strength.

GBP/USD

The pair remains above the 1.2580 support level. A drop below this mark could result in a move toward 1.2500, in line with a strengthening U.S. dollar.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
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