empty
 
 

Forex Analysis & Reviews: Analysts cast doubt on soft landing
time 08.12.2022 07:33 AM
time Relevance up to, 09.12.2022 07:05 AM

Soon all three major central banks will announce their rate decisions. However, I'm not particularly interested in speculation about the size of rate hikes by central banks. Recently, there have been not so many economic reports or crucial events. A few weeks ago, traders widely discussed the US mid-term election, political changes in the UK, the UK budget deficit, etc. Now, markets are in a lull. The economic calendar includes only several economic reports. As a rule, there are 5 really important reports which are published every month. All the others are less significant. Although traders also take them into account, they do not affect the wave marking. Currently, there are no crucial speeches, events, or macro stats.

However, traders are looking forward to the upcoming reports and events. Usually, in such situations, the construction of corrective waves begins. Now, I do not see any of them. Both instruments continue to be hovering near their highs. Demand for them remains buoyant although over the past few weeks there have been enough reasons to increase long positions on the US currency. What is more, analysts are now mulling over the likelihood of a recession in the United States.

The Financial Times conducted a survey, showing that many economists anticipate a mild recession in the US. Hence, 85% of economists polled project a recession by next year. Unemployment is likely to rise to 5.5%-6.5%. The majority of participating analysts expect the Fed to raise its benchmark policy rate by 50 basis points in December. The US economy may shrink by 1%. Shortly after, it will grow again. Notably, Jerome Powell has repeatedly stated that a strong labor market and minimal unemployment are hopeful signs against a recession. It appears Powell is right as the latest NFP report turned out to be upbeat. The unemployment rate remained at 3.7%, not far from a 5-decade low. The American economy expanded in the third quarter. It also climbed considerably in annual terms. Thus, there is no reason to panic.

This image is no longer relevant

Jerome Powell also believes that the "soft landing" is still possible. However, most of the economists polled by the Financial Times are not so optimistic. "A soft landing is extremely difficult and it almost never happens in history," Giorgio Primiceri, a professor at Northwestern University who participated in the survey, said. If the forecasts are correct, a recession in the US will be short-lived. However, if the Fed raises the interest rate to 5-5.5%, it could trigger a strong and long recession. In the UK, a recession may last 2 years. Chancellor of the Exchequer Jeremy Hunt and Bank of England Governor Andrew Bailey admitted such a possibility. In my opinion, if this scenario comes true, it will be extremely bullish for the US dollar. Now, it is unable to resume an uptrend.

Taking into account all these factors, I assume that the construction of the upward trend section has extended to five waves. It is completed or nearing its completion. It is recommended to open short positions with target levels located near 0.9994, which coincides with the Fibonacci correction level of 323.6%. The upward section of the trend may become more complicated and take a more extended form. The probability of this scenario is rather high.

This image is no longer relevant

The wave markup of the pound/dollar pair suggests the construction of a new downward trend wave. I would advise you to postpone long positions as the wave markup points at the construction of a downward trend section. It is better to sell the instrument at 1.1707, which coincides with the Fibonacci correction level of 161.8%. However, the e wave can take an even more extended form.

Chin Zhao,
ผู้เชี่ยวชาญด้านการวิเคราะห์ของ InstaForex
© 2007-2023
EURUSD
Euro vs US Dollar
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Start trade
Start trade

บทวิเคราะห์ของทาง InstaForex จะทำให้คุณทราบถึงแนวโน้มของตลาด! ในการที่เป็นลูกค้าของทาง InstaForex นั้นคุณจะได้รับการบริการเพื่อการซื้อขายอย่างเต็มประสิทธิภาพอย่างมากมาย

  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    เข้าร่วมการแข่งขัน
  • Chancy Deposit
    ฝากเงินในบัญชีของคุณใน $3,000 และรับ $1000 ไปเพิ่ม!
    ใน กุมภาพันธ์ ทางเราได้ออก$1000 ภายในแคมเปญ Chancy Deposit !
    คว้าโอกาสที่จะชนะด้วยการฝากเงิน $3,000 ไปในบัญชีเทรด เมื่อทำตามเงื่อนไขนี้แล้ว คุณก็จะกลายเป็นผู้เข้าร่วมแคมเปญ
    เข้าร่วมการแข่งขัน
  • เทรดให้ดีแล้วคว้ารางวัล
    เติมเงินในบัญชีของคุณอย่างน้อย $500 สมัครเข้าร่วมการแข่งขัน และลุ้นรับรางวัลอุปกรณ์ติดต่อสื่อสารแบบพกพา
    เข้าร่วมการแข่งขัน
  • โบนัส 100%
    โอกาสพิเศษของคุณในการรับโบนัส 100% จากเงินฝากของคุณ
    รับโบนัส
  • โบนัส 55%
    สมัครรับโบนัส 55% สำหรับการฝากทุกครั้ง
    รับโบนัส
  • โบนัส 30%
    รับโบนัส 30% ทุกครั้งที่คุณเติมเงินในบัญชีของคุณ
    รับโบนัส

Recommended Stories

EUR/USD. The Fed hit the dollar, the ECB hit the euro

The European Central Bank increased the interest rate by 50 points at this year's first meeting, while announcing a 50-point hike at the next meeting in March. Despite such hawkish

Irina Manzenko 05:13 2023-02-03 UTC+2

GBP/USD. The Bank of England disappointed the British currency

The Bank of England, following the results of the first meeting in 2023, raised interest rates by 50 basis points to a target of 4.0%. At the same time

Irina Manzenko 23:00 2023-02-02 UTC+2

The implications of the Fed press conference for the markets

Federal Reserve Chairman Jerome Powell said policymakers expect a couple more interest rate hikes before suspending their aggressive tightening campaign, even as they slowed their efforts to rein in inflation

Andrey Shevchenko 22:59 2023-02-02 UTC+2

The euro is capable of more

Anything that rises can stay high. After Federal Reserve Chairman Jerome Powell failed to play the role of super-cool hawk and released the market's animal spirits, EURUSD soared above 1.1

Marek Petkovich 22:59 2023-02-02 UTC+2

Jerome Powell tried his best to support the dollar, but the market turned out to be stronger

One event that the market has been anticipating for a very long time occurred yesterday evening. The market now only expects a 25 basis point rate hike after the most

Chin Zhao 15:26 2023-02-02 UTC+2

What will be the reaction of the pound to the Bank of England and the ECB rate hikes?

Today, the GBPUSD pair fell to its lowest level since September as investors await policy decisions from the Bank of England and the European Central Bank. The Bank of England

Irina Yanina 14:41 2023-02-02 UTC+2

EUR/USD: brief summary and near-term outlook

Following the results of the first meeting of this year, which ended on Wednesday, the U.S. Federal Reserve decided to raise the key interest rate by 0.25%, which coincided with

Jurij Tolin 13:58 2023-02-02 UTC+2

Adoption of crypto among women is on the rise

Investing in the crypto industry has been dominated by men since this asset class first appeared in 2010, but the situation is starting to change. According to a recent survey

Irina Yanina 12:57 2023-02-02 UTC+2

The ECB meeting and the 0.5% interest rate increase in the eurozone will pass without surprises

The European Central Bank will increase interest rates by 0.5 percent once more today, but investors will be more focused on any indications of how the cost of borrowing will

Jakub Novak 12:50 2023-02-02 UTC+2

EUR/USD. Overview for February 2, 2023

For the majority of the day on Wednesday, the EUR/USD currency pair was trading higher. Tradition dictates that we avoid discussing the outcomes of the Fed meeting and Jerome Powell's

Paolo Greco 11:35 2023-02-02 UTC+2
หากไม่สะดวกคุยในตอนนี้
ระบุคำถามไว้ได้ใน แชท.