This phrase applies to many things in the market right now. For example, I can say that for at least the whole of 2024 the market was "running ahead of the train," expecting the Federal Reserve to cut rates 6–7 times. Maybe it didn't demand it outright, but it certainly anticipated it. Now the market expects Jerome Powell to adopt an active rhetoric that will clarify the decision to be taken at the September meeting. However, once again, expectations may not align with reality. The fact is, Powell still has plenty of time to make the right decision. Why should he, in turn, "run ahead of the train"?

There is still a month left until the September meeting, during which new economic data will be released. Therefore, the central bank can calmly wait for new reports and confirm that the labor market is indeed "cooling" at a concerning pace, as the last three reports indicated. The central bank can verify that inflation is really rising under the influence of Donald Trump's tariff war rather than seasonal factors. And most importantly, it can gain a clearer picture of what approximate pace of inflation growth should be expected by year-end.

I would remind you that Powell himself has repeatedly said that conclusions about the impact of tariffs on the economy could not be drawn before autumn. Now it is clear that even autumn is not the right time to draw conclusions. Very few countries have signed trade agreements with the U.S., while Trump continues to impose new and more tariffs. Therefore, even an assessment of the average weighted import tariffs cannot be made at present—let alone their longer-term impact on the economy.

Thus, even in autumn, any conclusion about inflation will be based on interim data. Accordingly, inflation forecasts will be imprecise, and no radical monetary policy decisions can be made on such a basis. From this, I believe that on Friday Powell will not make any hints about a rate cut in September. Will maintaining a hawkish tone help the dollar? If it does, then only for a short period of time.

Wave Pattern for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to form an upward section of the trend. The wave structure still entirely depends on the news background related to Trump's decisions and U.S. foreign policy. Targets for this trend section may extend up to the 1.25 area. Accordingly, I continue to consider buying positions with targets near 1.1875, which corresponds to the 161.8% Fibonacci level, and higher. I assume that the formation of wave 4 has been completed. Therefore, it is still a good time for buying.

Wave Pattern for GBP/USD:

The wave structure of GBP/USD remains unchanged. We are dealing with an upward, impulsive section of the trend. Under Trump, the markets may face many more shocks and reversals, which could significantly affect the wave structure, but for now, the working scenario remains intact. Targets for the upward section of the trend are now located near 1.4017. At present, I assume that the formation of downward wave 4 has been completed. Therefore, I recommend buying with a target of 1.4017.

Main Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often subject to change.
2. If there is no confidence in the market situation, it is better to stay out.
3. One can never have 100% certainty about the direction of movement. Always remember to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.