Analysis of GBP/USD. June 15. The pound is happy about everything, even the increase in rates in the Eurozone
June 15, 2023 4:23 pm
For the GBP/USD pair, the wave analysis unexpectedly changes its appearance to a simpler and clearer one. Instead of a complex corrective phase of the trend, we can see an impulsive upward trend. The presumed wave 2 or b may have completed its formation last week. If this is the case, the formation of the upward wave 3 or c has begun and continues, providing an excellent opportunity for the British pound to rise to the 1.30 level. It is up to you to decide how justified this is based on the current news background. The British pound has no grounds to continue its rise to the 1.30 or 1.35 level (which is quite possible if we are referring to an impulsive phase of the trend). Wave 2 or b will not take on a more complex form. Wave analysis can always become more intricate, but I prefer to rely on its simple manifestations as they are easier to forecast.
The wave analysis of the EUR/USD pair differs from that of GBP/USD. A descending set of waves is expected for the euro, and a hypothetical complication of the upward phase of the trend is not currently considered. At the same time, everything indicates a new upward phase of the trend for the British pound, which opens up excellent prospects. This phase may be shortened, consisting of three waves, and wave 3 or c could even be completed today. However, this scenario is a reserved one.
Despite weak British statistics on Wednesday, the British pound continues to rise. The GBP/USD exchange rate increased by 50 basis points on Wednesday, 100 on Tuesday, and 70 on Thursday. The market responds to almost all news without delving too deeply into its essence. Today, there was no news in the UK, but several important reports were released in the US, some of which were weak. The market responded to them and the ECB meeting, which supported demand for the euro. The British pound uses any opportunity to rise even a little, and it does so excellently.
However, it all started with yesterday’s Federal Reserve meeting, where the phrase that all market participants were undoubtedly waiting for was announced. Jerome Powell stated that future interest rate hikes are not ruled out. The market was waiting for this since it remained unclear after the May meeting whether there would be further tightening. It is evident there will be, but this information did not help the US dollar. Powell also noted the good state of the labor market, stating that the economy consistently creates jobs, and unemployment remains low. All of this allows the FOMC to continue tightening. But now the wording “if necessary” should be applied. The Fed’s position is advantageous no matter how you look at it. A 5.25% interest rate is sufficient to bring inflation back to 2%, but the Fed can raise the rate even more without causing significant damage to the economy.
General conclusions.
The wave pattern of the GBP/USD pair has changed and now suggests the formation of an upward wave, which could end at any moment. It might be advisable to consider buying the pair at the moment, but the news background this week is strong, and the market may react sharply and ambiguously to it. Based on the analysis, I would spend time buying and selling now.
The pattern resembles the EUR/USD pair on a larger wave scale, but there are still some differences. The descending corrective phase of the trend is complete, and the formation of a new upward phase is continuing, which could end as early as tomorrow or take on a complete five-wave structure. Even if it becomes a three-wave structure, the third wave could be extended or shortened.
The material has been provided by InstaForex Company – www.instaforex.com
For the GBP/USD pair, the wave analysis unexpectedly changes its appearance to a simpler and clearer one. Instead of a complex corrective phase of the trend, we can see an impulsive upward trend. The presumed wave 2 or b may have completed its formation last week. If this is the case, the formation of the upward wave 3 or c has begun and continues, providing an excellent opportunity for the British pound to rise to the 1.30 level. It is up to you to decide how justified this is based on the current news background. The British pound has no grounds to continue its rise to the 1.30 or 1.35 level (which is quite possible if we are referring to an impulsive phase of the trend). Wave 2 or b will not take on a more complex form. Wave analysis can always become more intricate, but I prefer to rely on its simple manifestations as they are easier to forecast.
The wave analysis of the EUR/USD pair differs from that of GBP/USD. A descending set of waves is expected for the euro, and a hypothetical complication of the upward phase of the trend is not currently considered. At the same time, everything indicates a new upward phase of the trend for the British pound, which opens up excellent prospects. This phase may be shortened, consisting of three waves, and wave 3 or c could even be completed today. However, this scenario is a reserved one.
Despite weak British statistics on Wednesday, the British pound continues to rise. The GBP/USD exchange rate increased by 50 basis points on Wednesday, 100 on Tuesday, and 70 on Thursday. The market responds to almost all news without delving too deeply into its essence. Today, there was no news in the UK, but several important reports were released in the US, some of which were weak. The market responded to them and the ECB meeting, which supported demand for the euro. The British pound uses any opportunity to rise even a little, and it does so excellently.
However, it all started with yesterday’s Federal Reserve meeting, where the phrase that all market participants were undoubtedly waiting for was announced. Jerome Powell stated that future interest rate hikes are not ruled out. The market was waiting for this since it remained unclear after the May meeting whether there would be further tightening. It is evident there will be, but this information did not help the US dollar. Powell also noted the good state of the labor market, stating that the economy consistently creates jobs, and unemployment remains low. All of this allows the FOMC to continue tightening. But now the wording “if necessary” should be applied. The Fed’s position is advantageous no matter how you look at it. A 5.25% interest rate is sufficient to bring inflation back to 2%, but the Fed can raise the rate even more without causing significant damage to the economy.
General conclusions.
The wave pattern of the GBP/USD pair has changed and now suggests the formation of an upward wave, which could end at any moment. It might be advisable to consider buying the pair at the moment, but the news background this week is strong, and the market may react sharply and ambiguously to it. Based on the analysis, I would spend time buying and selling now.
The pattern resembles the EUR/USD pair on a larger wave scale, but there are still some differences. The descending corrective phase of the trend is complete, and the formation of a new upward phase is continuing, which could end as early as tomorrow or take on a complete five-wave structure. Even if it becomes a three-wave structure, the third wave could be extended or shortened.
The material has been provided by InstaForex Company – www.instaforex.com
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