Forex Analysis & Reviews: 06.02.2023 - What conclusions can we draw...

InstaForex - Official partner of Dragon Racing

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

06.02.2023 07:25 PM

What conclusions can we draw after three meetings?

As a result, meetings of the three central banks took place last week. As analysts and economists have been formulating theories regarding interest rates and the rhetoric of central bank presidents throughout January, this event can be referred to as long-awaited. After the meetings were all concluded, I can state that practically all of the judgments and tones used by the leaders of government regulators were typically predicted by analysts. It wasn't that difficult, though. Nobody questioned the likelihood that the ECB, Bank of England, and Fed would each increase interest rates by 25 basis points. Furthermore, the drop in the value of the euro and the pound cannot be attributed to "dovish" decisions taken by the ECB and the Bank of England. Instead, the Fed took a "dovish" tone, yet the dollar strengthened. I consequently reach the conclusion I anticipated in January. The market anticipated and considered all of the central bank's choices, and when they were made public, it started to make money on the trades it had already opened. As a result, in each of the three examples, we did not observe the movement that would have been apparent from the analysis of the results.

Future inflation reports will now determine how the EUR/USD and GBP/USD pairs turn out. The most optimistic predictions are made for the USA. Since the consumer price index has been falling for six consecutive months, a seventh slowdown is entirely conceivable. The anticipation that inflation will stop decreasing has no basis because the rate has been growing the entire time. Despite dropping for three consecutive months, inflation is still very high. Accordingly, the ECB should increase the rate even further in March. Christine Lagarde said the same thing last week. On this basis, everything regarding the ECB and its rate is evident. In March, it will increase by 50 basis points. Inflation has been falling in the UK for two entire months, although at a significantly slower rate than it has in the US or the EU. It's still higher than 10%. Andrew Bailey expressed confidence last week that the indicator might decline this year. Oil and gasoline costs have undoubtedly decreased over the past six months, but inflation in the US and EU is declining quickly and significantly, whereas it has not done so in the UK. Does the price of energy have a particular impact on British inflation?

All of the aforementioned information suggests that the Bank of England will be compelled to increase the rate by 50 basis points once more in March. The market's interest in the euro and the pound may revive as a result of these two rate increases. However, if this occurs in a month (two weeks before the following central bank meetings), the pair will have sufficient time to construct the essential corrective structures before attempting to develop new upward trend sections.

I draw the conclusion that the upward trend section's development is finished based on the analysis. As a result, sales with targets close to the Fibonacci level of 1.0350 (261.8%) can now be taken into consideration. There is still a chance that the upward section of the trend will become much more complicated. However, nearly for the first time in recent weeks, a picture that can be regarded as the start of the first downward wave as a part of a new trend segment is visible on the chart.

The development of a downward trend section is implied by the wave pattern of the pound/dollar pair. Currently, sales with targets at the Fibonacci level of 1.1508 (50.0%) might be taken into account. You can set a stop loss order above the peaks of waves e and b. Everything now depends on the decisions made by the Fed and the Bank of England in March, as well as on economic indicators, particularly those related to inflation. Wave c may take on a less extended form.

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.