Sometimes, when you read or hear Donald Trump's pronouncements, you get the uneasy feeling that our world has taken a wrong turn. The president of the country with the world's largest economy can openly promise to end the conflict between Ukraine and Russia within 24 hours—just elect him president. He can boast of having ended nine wars around the globe, although if you ask for details it is unlikely you will get a coherent answer. He can demand that Canada join the United States, as if it were not a sovereign nation and long-standing ally. He can insist that Europe hand over a "small island" in the Atlantic to US control—of course, for security reasons. He can impose any tariffs or sanctions on any country at will. He can expel anyone from the United States and admit anyone he chooses. He can openly break the law and collect tens or hundreds of billions from his own population while claiming tax cuts and "an era of US economic prosperity." He can start a war at any moment on fabricated grounds. He can carry out a coup in a neighboring country "because it is right." He can openly insult other politicians and officials. He can expel journalists from the White House. He can give 25 interviews a day, leaving one to wonder whether the president has any time left for anything beyond social media posts and interviews.
On Tuesday, October 6, at a rally in Nebraska, Donald Trump publicly said that Iran could destroy San Diego and Los Angeles and that this would be a small price to pay for the security of the United States and the world. Has a migration wave from those cities already begun? Remarkably, the crowd at the rally openly cheered the president's words, which bordered on the surreal. At this rate, American cities and states might soon seek to secede from the United States to avoid being used as bargaining chips in Trump's political and geopolitical games.
Los Angeles Mayor Karen Bass bluntly said a president's job is to protect the country, not to encourage threats from abroad. California Governor Gavin Newsom reminded audiences that last year Mr. Trump deployed the National Guard and special units to his state to suppress perfectly lawful and peaceful protests—actions Americans have a constitutional right to hold. "He is crazy and dangerous," Mr. Newsom concluded. San Diego Mayor Todd Gloria said his city is neither a "small price" nor a "bargaining chip" and urged Mr. Trump to keep San Diego out of reckless wars. According to numerous polls, a large share of the American public still does not understand why a war with Iran was needed. How the dollar can rise in such circumstances is also hard to comprehend.
Other articles by the author:
EUR/USD review. October 7. Market miracle—USD falls!
GBP/USD review. October 7. Bank of England officials ready to tighten
Trading recommendations and trade analysis for EUR/USD on October 7
Trading recommendations and trade analysis for GBP/USD on October 7
Trading recommendations for EUR/USD
EUR/USD continues to move lower, but we still view the decline as a correction ahead of a new uptrend. The global fundamental backdrop for the dollar remains negative, but in 2026 geopolitics first and then the Fed's hawkish stance provided powerful support for the US currency. When the price sits below the moving average, shorts can be considered with targets at 1.1182 and 1.1169.
Above the moving average, long positions are relevant with targets of 1.1353 and 1.1414.
Trading recommendations for GBP/USD
GBP/USD continues an illogical downward move. Donald Trump's policies will keep pressuring the US economy, so we do not expect long-term dollar weakness. So far, 2026 has been positive for the dollar because geopolitics and inflation have driven capital to safety and forced the Fed back toward tightening. However, on the weekly timeframe, the pair remains flat between 1.3150 and 1.3780 inside a four-year uptrend, which supports a medium-term outlook for sterling. Longs with targets of 1.3367 and 1.3428 can be considered if the price is above the moving average. Prices below the moving average allow trading the downside with targets at 1.3184 and 1.3141. Be cautious with shorts, as the price sits at the lower boundary of the long-term sideways channel.
Explanations of the illustrations
Regression channels help identify the current trend.
If both channels point the same way, the trend is strong.
The moving average (settings 20,0, smoothed) defines the short-term tendency and the direction traders should follow.
Murray levels are target levels for moves and corrections.
Volatility levels (red lines) mark the likely price channel for the next 24 hours based on current volatility.
The CCI indicator entering oversold (below -250) or overbought (above +250) territory signals a likely trend reversal.
