Forex Analysis & Reviews: 12.02.2024 - What to expect for the...

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 - Official partner of Dragon Racing

12.02.2024 12:03 AM

What to expect for the British pound next week?

Traditionally, there will be fewer events in the UK, but at least we can look forward to important ones. The British pound continues to stand firm against the US dollar, as market expectations regarding the monetary policy of the Bank of England remain the same. Market participants do not expect a rate cut in the coming months, unlike the scenarios for the European Central Bank and the Federal Reserve. While the euro and the dollar have their own dynamics, the British pound, despite its wave pattern, continues to hold its ground. More precisely, it continues to stay in one place.

In such a situation, I would say that news almost has no practical significance. How many important events have occurred in the last two months while the GBP/USD instrument remained in a sideways trend? Clearly, there have been many, but each time, the market refused to break out of the range. So what has changed now? GBP/USD has finally breached the important level of 1.2627, but the British pound, in the four days following the breakthrough, showed no interest in declining. What are the chances that even after significant events, the market will return to selling? In my opinion, they are not high.

BoE Governor Andrew Bailey will start the week by delivering a speech. I don't think Bailey will change his rhetoric with every speech, but still, if we can't expect important information from the head of the BoE, then from whom? On Tuesday, reports on unemployment and wages will be released, which may surprise market participants but these reports are unlikely to change the current sentiment to a bearish one.

However, on Wednesday, an important inflation report could significantly impact the pound's current resilience. Inflation for January may just increase to 4.1%-4.2%. This means that the BoE will have even fewer reasons to talk about rate cuts or any other measures to ease financial conditions right now. Core inflation will likely remain around 5.1%. In other words, it may continue to rise without slowing down.

On Thursday, reports on GDP and industrial production will be released, followed by a retail sales report on Friday. In the current situation, I don't think these data are capable of exerting strong pressure on the pound. Based on everything I mentioned, I believe that you should focus on Bailey's speech and the inflation report.

Based on the analysis, I conclude that a bearish wave pattern is being formed. Wave 2 or b appears to be complete, so in the near future, I expect an impulsive descending wave 3 or c to form with a significant decline in the instrument. The failed attempt to break through the 1.1125 level, which corresponds to the 23.6% Fibonacci, suggests that the market is prepared to sell a month ago. I am currently considering selling. I will only consider short positions with targets around the level of 1.0462, which corresponds to 127.2% Fibonacci.

The wave pattern for the GBP/USD pair suggests a decline. At this time, I am considering selling the instrument with targets below the 1.2039 mark because wave 2 or b will eventually end, just like the sideways trend. I would wait for a successful attempt to break through the 1.2627 level as this will serve as a sell signal. In the near future, there could be another signal in the form of an unsuccessful attempt to break this level. If it appears, the pair could firmly fall at least to the level of 1.2468, which would already be a significant achievement for the dollar, as the demand for it remains very low.

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.