I expect the EUR/USD instrument to fall further, not least because the Fed will start lowering interest rates much later than the market expects. However, the second factor that will reduce the demand for the single currency is the European Central Bank's monetary policy, which is becoming more complicated.

I assume that the market initially expected the first rate cut in the fall. Then the deadlines smoothly moved to the summer. However, the rhetoric of the members of the ECB's Governing Council is so contradictory and vague that it has been quite difficult to draw conclusions. Fabio Panetta said that "the time for a reversal of the monetary policy stance is fast approaching." Panetta favors quick and gradual rate cuts to avoid shocking the markets. He hinted that there are different opinions within the Governing Council regarding the timing and pace of monetary easing, and the policy board needs to consider the pros and cons of cutting interest rates.

According to Panetta, price stability is best maintained by aiming for 2% inflation in the long term. A "condition for monetary normalization to begin is that the achievement of the inflation target is not jeopardized by a potential interest rate cut,". "Any speculation on the exact timing of monetary easing would be a sterile exercise. Inflation is falling as quickly as it rose, but the risks of acceleration also persist. In 2024, the slowdown will be much slower than in 2023," Panetta said.

In my opinion, "fast approaching" does not mean the upcoming meetings. I believe that Panetta himself understands that it is not yet time for the first rate cut. After all, "fast approaching" may also suggest the beginning of summer. It is a highly conditional and stretchable concept. Therefore, I cannot draw any clear conclusions from his words. I still expect the ECB rate cut at roughly the same time as the first rate cut by the Fed. And this should continue to support demand for the US dollar.

Based on the analysis, I conclude that a bearish wave pattern is being formed. Wave 2 or b appears to be complete, so in the near future, I expect an impulsive descending wave 3 or c to form with a significant decline in the instrument. The failed attempt to break through the 1.1125 level, which corresponds to the 23.6% Fibonacci, suggests that the market is prepared to sell a month ago. I am currently considering selling.

The wave pattern for the GBP/USD pair suggests a decline. At this time, I am considering selling the instrument with targets below the 1.2039 mark because wave 2 or b will eventually end, just like the sideways trend. A successful attempt to break through the 1.2627 level acted as a sell signal. Another signal was formed, in the form of an unsuccessful attempt to break this level from below. Now I am quite confident about the instrument's decline, at least to the 1.2468 level, which would already be a significant achievement for the dollar, as the demand for it remains very low.