Forex Analysis & Reviews: 28.09.2023 - The Fed keeps pressure on...

28.09.2023 04:11 AM

The Fed keeps pressure on the euro and pound, but that's not the only factor at play

Another day has passed in the forex market, and once again, the British pound and euro both closed lower. On any given day, we can identify certain factors that may have pulled down the euro and pound while boosting the dollar (although it may look the opposite on charts). However, the weak news background, in my humble opinion, is not the cause of the almost daily decline in demand for European currencies.

First of all, there have been no news updates from the UK since the Bank of England's meeting. Nevertheless, the British pound has been declining every day. One might assume that it's due to American news, but there's a problem with this hypothesis: there haven't been any important news or reports from the US either. Of course, reports are occasionally published, and FOMC members make statements, but not all of them strongly support the dollar, and not all of them are significant enough to boost the US currency.

Based on all of the above, I believe that the news background we receive every day is not the reason why the dollar keeps rising. On Wednesday, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, said that there's nearly a 50-50 chance that interest rates may need to move significantly higher than previously anticipated, which was difficult to predict in advance. Kashkari also said that everybody on the Federal Open Market Committee is committed to bringing inflation back down to the Fed's 2% target, and the accelerated pace of inflation over the past two months now suggests that the Bank would then have to raise rates further, possibly as soon as November. Did Kashkari's remarks boost the dollar on Wednesday? Theoretically, they could have, but then why was demand for the US currency decreasing over the past year when the FOMC was raising rates every one and a half months?

I believe that currently, several factors are working in favor of the US currency. This includes concerns about global economic conditions, the prolonged rise of the euro and pound, which had to come to an end at some point, and the dovish stances of the European Central Bank and the Bank of England. In addition, the strong state of the US economy compared to the European and British economies also contributes to this trend. I believe that in the near future, corrective waves will begin to form, but then we will see a new decline, which could sink both instruments even lower than their current positions.

Based on the analysis conducted, I came to the conclusion that a downward wave pattern is being formed. I still believe that targets in the 1.0500-1.0600 range for the downtrend are quite feasible, especially since they are quite near. Therefore, I will continue to sell the instrument. Since the downward wave did not end near the 1.0637 level, we can expect the pair to fall to the 1.05 mark and the level of 1.0465, which is equivalent to the 127.2% Fibonacci retracement. However, the second corrective wave will start sooner or later.

The wave pattern of the GBP/USD instrument suggests a decline within a new downtrend. At most, the British pound can expect the formation of wave 2 or b in the near future. However, even with a corrective wave, there are still significant challenges. At this time, I would remain cautious about selling, as an unsuccessful attempt to break below the 1.2115 level may indicate that the market is ready to form a corrective wave.

你今天已经点赞上这篇文章了

*这里的市场分析是为了增加您对市场的了解，而不是给出交易的指示。

If you have any content questions, please contact editorial-board@instaforex.com

Fundamental analysis

Chin Zhao,
Analytical expert of InstaForex
© 2007-2025

该作者的更多文章

电子邮件订阅

EURUSD

Euro vs US Dollar

选择时间框架

分钟

小时

天

周

开始交易

通过InstaForex赚取加密货币汇率变动的收益。

下载MetaTrader 4并开启您的第一笔交易。

推荐文章

特朗普再次未能說服鮑威爾

歐元/美元。6月歐洲央行會議：預覽

美元重返戰場

現在是否是 Christine Lagarde 離開職位的合適時機？

USD/CAD. 分析與預測

股市認為特朗普的關稅遊戲不會產生重大影響 (#NDX 和 #SPX 差價合約的增長可能會繼續)

市場在玩一場危險遊戲

6月4日要注意什麼？給初學者的基本事件解析

GBP/USD 概況 – 6月4日：特朗普只對大魚感興趣

歐元/美元概況 - 6月4日：言語，言語……行動在哪裡？

Top analytics