Can Republicans, led by Donald Trump, expect to win the elections in November? If winning means maintaining a majority in both houses, then it seems unlikely. Retaining a majority in the Senate in the current circumstances would already be considered a success. Donald Trump might point to the rising stock market, potential decreases in inflation if the conflict in the Middle East is resolved, and a relatively low unemployment rate as victories. However, the sharp rise in the cost of living, the current high inflation, and the White House's immigration and tariff policies will outweigh all the "positive" aspects of Trump's leadership.

For American consumers, a key indicator of the administration's successful policies is the cost of living, which directly impacts their quality of life and political views. If the cost of living rises faster than wages (which has been a constant trend in America in recent years), the average American John is utterly uninterested in what international successes Trump has achieved, or how many wars he has ended, or whether he is a contender for the Nobel Peace Prize this year. If the president's administration fails to provide a decent standard of living for its population, external victories or stock market records will not matter.

Economists Larry Summers, Marijn Bolhuis, and Judd Cramer have calculated that the real cost of living in the U.S. increased by 14% in 2023, while official inflation rose by only 4%. This discrepancy arises because inflation does not account for the costs of loans or mortgages, which significantly affect the prices of cars, real estate, and rental housing. These categories consume more than 50% of many Americans' monthly incomes.

Therefore, while bread or sausages at the nearest supermarket might have seen minor price increases, mortgages, auto loans, and rental prices have risen significantly, creating a substantial hole in the budgets of many Americans. Based on all of the above, Americans are likely to believe in November 2026 that the decline in their standard of living is a consequence of the policies of the last U.S. presidents, particularly Trump. If Trump cannot assure an improvement in the standard of living, then his potential second term in office will be seen as a mistake.

Wave Picture for EUR/USD:

Based on the conducted analysis of EUR/USD, I conclude that the instrument remains within an upward section of the trend (lower picture), while in a more short-term perspective, it is within a corrective structure. The corrective wave set a-b-c appears to be complete. Consequently, the construction of wave 3 or C continues, which may be part of wave C. The entire wave C (if the current wave marking is correct) may complete its formation much below the 14 figure. However, for such a scenario, strong geopolitical support would be required. Otherwise, the downward wave set may take the form of a-b-c and be completed around the 1.1578 mark.

Wave Picture for GBP/USD:

The wave picture for the GBP/USD instrument has become clearer over time. We now see a distinct upward structure on the charts, which is complete. Therefore, I expect a downward wave set to form, which may take an impulsive form and align with the impulsive structure of the EUR/USD instrument. Consequently, after a 300-pip decline, a corrective wave can be expected, followed by a new drop towards the 30-31 figures. I had warned in advance about the new decline of the pound, but I expected a correction. However, the harsh reality is that this may be a full-fledged impulsive structure, given the strength of its first wave.

Main Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to play out and often entail changes.
2. If there is no certainty about what is happening in the market, it is better not to enter it.
3. There is never 100% certainty in the direction of movement. Remember to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.