Forex Analysis & Reviews: 31.01.2023 - GBP/USD. Analysis for...

Live Chat

InstaForex Loprais Team - Official participant of the Dakar rally

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

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

OYS account

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

InstaForex Loprais Team - Official participant of the Dakar rally

31.01.2023 09:29 AM

GBP/USD. Analysis for January 31, 2023

The wave analysis for the pound/dollar pair now appears rather complex, doesn't call for any clarifications, but starts to differ significantly from the analysis of the euro/dollar pair. Our five-wave upward trend section has the pattern a-b-c-d-e and is most likely already finished. Although the recent increase in the pair's quotes proved to be too powerful, wave b has developed into a form that is too long and is on the edge of cancellation. I assume that the downward section of the trend has started to form and will take at least a three-wave form. The current upward wave will cease to be regarded as wave b if the increase in quotes even somewhat persists, and the analysis for the entire wave will need to be adjusted. However, if the wave analysis is still accurate, I still anticipate the development of a falling wave, and the pair can decline by 500–600 basis points, up to a level of 1.1508, which corresponds to a 50.0% Fibonacci ratio. The validity of the current wave analysis is maintained because the peak of the proposed wave b does not yet surpass the peak of wave e.

The British pound could begin a long decline.

The pound/dollar exchange rate has been moving recently with horizontal dynamics. Since quotes remain close to the peaks of waves b and e, there is nothing to be said regarding changes in the exchange rate. Although wave b is about to be canceled, the market is still not in a rush to lower demand for the pair. It would be far more sensible and attractive to first develop three waves downward before beginning to develop a new upward trend section. Although the market does not now show any willingness to decrease demand for the pound or increase demand for the dollar, I do not completely rule out the start of the development of a downward wave c this week. It has no desire to participate in the preparation for the Fed or Bank of England meetings.

The British economy has been the topic of much discussion recently, and most analysts concur that 2023 will be a very challenging year for the UK. Higher taxes, weaker-than-inflation wage growth, and excessive inflation that the regulator is unable to control just yet. All of this should have prompted Andrew Bailey or other Bank of England members to make new, aggressive statements, but in practice, things can go the other way. A severe recession might be avoided by the regulator's decision. He can anticipate that as energy prices decline over time, inflation will also gradually decline. The markets are uneasy because no one knows for sure what monetary policy the regulator will follow in the first part of the year. Although I believe that rates will continue to rise, I also believe that the tone will gradually shift in favor of "dovish." The pair needs this precisely to create the required downward wave.

Conclusions in general

The development of a new downward trend section is predicated on the wave pattern of the pound/dollar pair. Currently, sales with targets at the level of 1.1508, or 50.0% Fibonacci, might be taken into account. You can set a stop-loss order above the peaks of waves e and b. The upward section of the trend is probably over; however, it might yet take a longer form than it does right now. However, you must exercise caution while making sales because the pound tends to rise.

The display is comparable to the euro/dollar pair at the higher wave scale, but differences still start to show. Currently, the upward correction portion of the trend is almost finished (or has already been completed). If this assumption is accurate, then we must wait for the development of a downward section to continue for at least three waves with the possibility of a decrease in the area of figure 15.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.