empty
InstaForex Loprais Team - Official participant of the Dakar rally
InstaForex Loprais Team - Official participant of the Dakar rally
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
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
02.12.2022 06:46 AM
We are discussing Powell's speech.
Open trading account Open demo account

The demand for US currency significantly dropped on Wednesday night and Thursday during the day. Due to this, the euro/dollar and pound/dollar instruments saw price increases of about 200 and 300 basis points, respectively. In yesterday's reviews, I already conducted a thorough analysis of the news landscape of these days. I concluded that economic data could not have a significant enough impact on market sentiment to cause the US dollar to depreciate significantly against the euro and the pound. The market did not react that way because the news background was not that bad for the dollar. The only thing that has anything to do with the US dollar's decline is Jerome Powell's speech on Wednesday night.

Other analysts have written quite a bit about this subject, and most concur that Powell's speech didn't offer anything novel or demoralizing. The Fed President noted that economic growth is below the anticipated trajectory, inflation is still very high, and a slowdown in the rate increase could occur as early as December. However, he added that the interest rate might rise for longer than the Fed had anticipated in September. What qualifies as the "hawkish" element? Why did the market respond to the "dovish" statements rather than him? Other FOMC members have expressed this "dovish" rhetoric numerous, but the market did not retaliate as violently.

I don't think explaining how the market reacted to the speech is worthwhile because it initially "aimed" at buying both instruments. Just look at how the US session began on Thursday and how the US dollar immediately began to decline (and both instruments up). Although Powell's speech was given days earlier, the American statistics at the start of the session had yet to be made public. However, the market also identified factors that reduced demand for the dollar. Thus, I conclude that, rather than Powell's speech being full of "dovish" theses, the market decided that the demand for the dollar was declining. It didn't abound, though.

This image is no longer relevant

What comes next? The wave e peak on the euro currency has been broken once more, and the wave marking may get even more complicated. The British pound believes that everything is the same. Another significant Nonfarm Payrolls report will be released in the USA today, which is expected to send the market into a frenzy. But I think the market won't care what this report is worth. Regardless of how compelling the report is, the value of the US dollar will decline if they decide to keep selling it. Perhaps I need to be more accurate and treat the market fairly. I would be okay if the situation changed the next day completely. But if the market interprets the news background in its convenient manner, what use is it to analyze it at all?

I conclude that the upward trend section's construction is complete and has increased complexity to five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. The trend's upward portion could become more complicated and take on a longer form, and the likelihood of this happening is increasing daily.

This image is no longer relevant

The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. I cannot suggest purchasing the instrument immediately because the wave marking already permits the development of a downward trend section. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form.

Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
All Analytics
Wave analysis
GBP/USD Analysis on May 16, 2025 The wave structure for the GBP/USD instrument continues to indicate the formation of a bullish impulsive wave sequence. "Thanks" to Donald Trump, the wave pattern closely mirrors that of EUR/USD
Chin Zhao
18:43 2025-05-16 +02:00
2425
Wave analysis
EUR/USD Analysis on May 16, 2025 The wave structure on the 4-hour chart for the EUR/USD pair has transformed into an upward one and continues to hold this formation. I believe there is little doubt that
Chin Zhao
18:40 2025-05-16 +02:00
2395
Breaking Forecast Trading Plan Cryptocurrencies USD/RUB Russian Economy Video Analysis
Trading Instruments
EURUSD GBPUSD USDCHF USDCAD USDJPY AUDUSD EURGBP EURJPY NZDUSD EURNZD Silver Gold #CL #USDX COVID-19 Bitcoin
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY. Analysis and Forecast

The bulls of the Japanese yen have not been significantly affected by the disappointing GDP report for Japan's first quarter. This is largely due to growing expectations that the Bank
Irina Yanina 18:38 2025-05-16 UTC+2

XAU/USD. Analysis and Forecast

Gold is experiencing renewed intraday pressure, falling below the key psychological level of $3200 during the first half of the European session on Friday. Optimism surrounding the trade truce between
Irina Yanina 18:37 2025-05-16 UTC+2

Market gets lost in crowd

Investors are so confident that Donald Trump is following the stock market's lead that the S&P 500 no longer needs a reason to rise. The broad equity index had been
Marek Petkovich 11:40 2025-05-16 UTC+2

Japan on the Brink of Recession

The GDP report published on Thursday revealed that Japan's economy contracted by 0.7% year-over-year in the first quarter—its first annual decline in the past year and significantly worse than expected
Kuvat Raharjo 11:00 2025-05-16 UTC+2

Investors Continue Digesting the Impact of the Tariff Truce Between the U.S. and China (There Is a Chance of Renewed Corrective Decline in Gold and Oil Prices)

Markets have fully priced in the outcome of the U.S.–China talks, which resulted in a 90-day trade truce. Weaker-than-expected U.S. economic data offset the early-week optimism. The recent rally lost
Pati Gani 10:49 2025-05-16 UTC+2

What to Pay Attention to on May 16? A Breakdown of Fundamental Events for Beginners

Few macroeconomic events are scheduled for Friday, and they are not more significant than the reports released on Thursday, which did not provoke any market reaction. In essence, the only
Paolo Greco 06:17 2025-05-16 UTC+2

GBP/USD Overview – May 16: The Market Has No Desire to Sell

The GBP/USD currency pair traded sideways on Thursday with low volatility—typical behavior for the pound over the past month. First, there was a classic flat range; now, we see "swings"
Paolo Greco 03:54 2025-05-16 UTC+2

EUR/USD Overview – May 16: The Dollar Remains the World's "Number One Currency"

The EUR/USD currency pair moved in both directions on Thursday but ultimately remained below the moving average line. Its position beneath the moving average allows us to expect further strengthening
Paolo Greco 03:54 2025-05-16 UTC+2

Are Things Really So Optimistic with the Deals with China and the UK?

Last week, Donald Trump announced the signing of the first deal with the United Kingdom under his "America's Liberation" campaign. It was later revealed that the deal had not been
Chin Zhao 00:40 2025-05-16 UTC+2

The Euro Didn't End Up in the Junkyard

Chinese goods have flooded the European market, but EUR/USD bulls aren't alarmed by this. While the U.S. has reduced tariffs on imports from China, the weighted average tariff still sits
Marek Petkovich 00:39 2025-05-16 UTC+2

Top analytics

Relevance up to 04:00 2025-05-21 UTC--4
Japan on the Brink of Recession
11:00 2025-05-16
Fundamental analysis
Relevance up to 11:00 2025-05-30 UTC--4
Trading Signals for EUR/USD for May 16-19, 2025: sell below 1.1230 (200 EMA - 6/8 Murray)
17:04 2025-05-16
Technical analysis
Relevance up to 11:00 2025-05-30 UTC--4
Trading Signals for GOLD for May 16-19, 2025: sell below $3,211 -3,226 (200 EMA - 21 SMA)
17:02 2025-05-16
Technical analysis
Relevance up to 04:00 2025-05-19 UTC--4
Investors Continue Digesting the Impact of the Tariff Truce Between the U.S. and China (There Is a Chance of Renewed Corrective Decline in Gold and Oil Prices)
10:49 2025-05-16
Fundamental analysis
Relevance up to 06:00 2025-05-19 UTC--4
US Market News Digest for May 16
13:20 2025-05-16
News
Can't speak right now?
Ask your question in the chat.
Widget callback
Callback widget
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.