empty
InstaForex Loprais Team - Official participant of the Dakar rally
InstaForex Loprais Team - Official participant of the Dakar rally
This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.
Start as Beginner
How to start trading
Useful information
Training and recordings
InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.
Become Investor
PAMM System
ForexCopy System
Passive investments
Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.
Become Partner
Main Page
Partner Area
Advantages for Affiliates
Registration
This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.
All Promo Campaigns
Bonuses
Contests
Events
Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.
Full details
Forums
We are in social networks
Forex humour
Forex Portal
InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.
Learn More
History
Why Choose Us
InstaSport
Regulation
Company News
Awards
InstaForex Stars
InstaForex Offline
Headquarters
Key documents
Social Responsibility
06.05.2025 12:50 AM
Fed Rate Cut Probability Is Near Zero
Open trading account Open demo account

This image is no longer relevant

This week marks the third Federal Reserve meeting of the year. At the first two meetings, monetary policy parameters remained unchanged, and there is virtually no chance of a rate cut or hike on May 7. I say "cut or hike" because Trump's trade policy could, at some point, force the FOMC even to tighten monetary policy. That may sound hard to believe now, but just a couple of months ago, few market participants expected such a rally from the U.S. dollar or such a disruption of the global trade balance from Trump.

Trump's policies could significantly raise inflation in the U.S. — inflation the Fed has been trying to tame for years. The Fed may raise interest rates if inflation returns to problematic levels. Let's recall that Powell and other Fed governors have frequently emphasized the dual mandate of the central bank: full employment and low inflation. As labor market and unemployment data showed on Friday, the situation did not worsen in April. Inflation also remains relatively low, so at the moment, the best decision is to pause. Powell also stated that the first effects of the new trade policy won't become visible before summer — or possibly even fall. Thus, it's reasonable to assume that the Fed won't change interest rates at least until then.

This image is no longer relevant

As for market expectations, only 1.8% of economists foresee a 25 basis point rate cut on May 7. For the June meeting, the probability of a rate cut (according to the CME FedWatch tool) stands at 33.6%. By year-end, most economists expect three to four rounds of easing. This means that most of the market anticipates a notable deterioration in U.S. economic indicators during the summer, pushing the Fed to actively lower rates in the second half of the year. If the market barely reacts to rate cuts by the European Central Bank or Bank of England, I have little doubt that it will react to Fed easing. Based on the current wave count, further dollar depreciation remains the primary scenario — and the news backdrop supports this view.

Wave Analysis of EUR/USD:

Based on the analysis of EUR/USD, I conclude that the pair continues to form an upward trend segment. In the near term, the wave count will depend entirely on the position and actions of the U.S. president. That must be constantly kept in mind. According to wave theory alone, I had expected a three-wave correction pattern within Wave 2. However, Wave 2 has already completed as a single-wave correction. Wave 3 of the upward trend is now underway, with targets potentially reaching the 1.2500 area. Their attainment depends solely on Trump. At the moment, Wave 2 within Wave 3 appears close to completion. Therefore, I am considering long positions with targets above 1.1572, corresponding to the 423.6% Fibonacci extension level.

This image is no longer relevant

Wave Analysis of GBP/USD:

The wave count for GBP/USD has transformed. We are now dealing with a bullish, impulsive trend segment. Unfortunately, under Donald Trump, markets may face many shocks and reversals that defy wave counts and any kind of technical analysis. The upward Wave 3 is unfolding, with nearby targets at 1.3541 and 1.3714. It would be ideal to see a corrective Wave 2 within Wave 3 before the rally resumes. But for that to happen, the dollar must strengthen, requiring someone to buy it. Trump must stop imposing tariffs.

Core Principles of My Analysis:

  1. Wave structures should be simple and clear. Complex structures are hard to trade and often lead to changes.
  2. If you're uncertain about what's happening in the market, it's better not to enter.
  3. There is never 100% certainty in market direction. Always use Stop Loss protection.
  4. Wave analysis can 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
All Analytics
Fundamental analysis
Market: Do or Die! Markets can remain irrational longer than you can remain solvent. The S&P 500 rally from the April lows—adding $8.6 trillion in market cap—often appeared irrational. Investors ignored the Federal Reserve's
Marek Petkovich
08:23 2025-05-21 +02:00
1060
Fundamental analysis
GBP/USD Overview – May 21: The Rollercoaster Continues On Tuesday, the GBP/USD currency pair declined, unlike on Monday. While the euro's movement required searching for reasons behind the dollar's drop, the technical picture for the pound is straightforward
Paolo Greco
07:46 2025-05-21 +02:00
1090
Breaking Forecast Trading Plan Cryptocurrencies USD/RUB Russian Economy Video Analysis
Trading Instruments
EURUSD GBPUSD USDCHF USDCAD USDJPY AUDUSD EURGBP EURJPY NZDUSD EURNZD Silver Gold #CL #USDX COVID-19 Bitcoin
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Market: Do or Die!

Markets can remain irrational longer than you can remain solvent. The S&P 500 rally from the April lows—adding $8.6 trillion in market cap—often appeared irrational. Investors ignored the Federal Reserve's
Marek Petkovich 08:23 2025-05-21 UTC+2

GBP/USD Overview – May 21: The Rollercoaster Continues

On Tuesday, the GBP/USD currency pair declined, unlike on Monday. While the euro's movement required searching for reasons behind the dollar's drop, the technical picture for the pound is straightforward
Paolo Greco 07:46 2025-05-21 UTC+2

EUR/USD Overview – May 21: The Theater of Chaos and Absurdity Continues

The EUR/USD currency pair moved sluggishly on Tuesday, which was not surprising given the absence of news. Monday didn't bring much in the way of important news either
Paolo Greco 07:46 2025-05-21 UTC+2

What to Pay Attention to on May 21? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic events are scheduled for Wednesday. However, the UK inflation report holds significant importance for the market, or rather, used to . As we can see, traders continue
Paolo Greco 06:45 2025-05-21 UTC+2

The Fed Maintains a Wait-and-See Approach

The market expects active measures from the U.S. central bank, while Donald Trump keeps demanding that Jerome Powell cut interest rates. It's worth noting that Powell cannot make such decisions
Chin Zhao 00:41 2025-05-21 UTC+2

The Dollar Regains Its Spirit

As the CFTC report showed, investors are still not very impressed that the US and China have managed to reduce trade tensions and take a pause for negotiations
Kuvat Raharjo 00:26 2025-05-21 UTC+2

EUR/USD: Weak Dollar Meets Indecisive Euro

The EUR/USD pair has consolidated above the 1.1200 level, reflecting the overall weakening of the U.S. dollar. The "bearish attack" we witnessed last week ended in failure. EUR/USD sellers were
Irina Manzenko 19:35 2025-05-20 UTC+2

Euro Exhausts Bullish Momentum

Inflation in the eurozone remained unchanged in April compared to March, fully in line with forecasts—2.2% year-over-year for the headline index, and 2.7% year-over-year for the core index. This inflation
Kuvat Raharjo 19:16 2025-05-20 UTC+2

AUD/NZD. Analysis and Forecast

The AUD/NZD pair is declining, drawing seller interest following the Reserve Bank of Australia's (RBA) decision to lower the official cash rate (OCR) by 25 basis points to 3.85%. Although
Irina Yanina 19:09 2025-05-20 UTC+2

USD/CAD. Current Market Situation Amid Mixed Fundamental Background

The pair is under pressure, trading within the familiar range established earlier. At the moment, the fundamental background is mixed. Crude oil prices are struggling to attract significant buyers, especially
Irina Yanina 19:07 2025-05-20 UTC+2

Top analytics

Relevance up to 23:00 2025-05-21 UTC--4
EUR/USD Forecast for May 21, 2025
05:19 2025-05-21
Technical analysis
Relevance up to 20:00 2025-05-21 UTC--4
Trading Recommendations and Analysis for EUR/USD on May 21: The Euro Continues to Climb
03:48 2025-05-21
Trading plan
Relevance up to 20:00 2025-05-21 UTC--4
Trading Recommendations and Analysis for GBP/USD on May 21: The British Pound Remains in a Flat Range
03:48 2025-05-21
Trading plan
Relevance up to 00:00 2025-05-22 UTC--4
How to Trade the EUR/USD Pair on May 21? Simple Tips and Trade Analysis for Beginners
06:17 2025-05-21
Trading plan
Relevance up to 20:00 2025-05-21 UTC--4
EUR/USD Overview – May 21: The Theater of Chaos and Absurdity Continues
07:46 2025-05-21
Fundamental analysis
Can't speak right now?
Ask your question in the chat.
Widget callback
Callback widget
 

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.