empty
03.02.2022 09:40 AM
Trading plan for EUR/USD and GBP/USD on February 3, 2022

The only thing that matters for the pound today is the results of the meeting of the Board of the Bank of England. Moreover, the probability of an increase in the refinancing rate from 0.25% to 0.50% is extremely high. Last December, the British regulator raised the rate from 0.10% to 0.25%, which led to a long, and most importantly impressive, growth of the pound. Now, it is quite possible that exactly the same thing will happen today and we will witness another whole month of non-stop strengthening of the British currency. However, the December decision came as a complete surprise to everyone, which is the main reason for such a sharp growth of the pound. This time, the market as a whole is ready for an increase in the refinancing rate, and this will not be something unexpected for market participants.

Therefore, such an aggressive reaction is clearly not worth waiting for. Nevertheless, there are suspicions that the results of the meeting will somewhat surprise market participants. After all, the refinancing rate was raised only a month and a half ago, and too little time has passed since then to be able to assess the effect of this decision. A logical step would be to wait at least three months before taking further steps to tighten monetary policy. In this case, the Bank of England might leave everything as it is today, while market participants are already ready by the expectation of rising interest rates. If so, the pound will inevitably lose its position.

Refinancing rate (UK):

This image is no longer relevant

It is possible that the main event of not only the week, but the whole of February will be today's meeting of the Board of the European Central Bank, after which plans to tighten monetary policy up to an increase in the refinancing rate will be announced before the end of this year. The actions of both the BoE and the Fed suggest such reflections. And if these expectations are justified, then the euro will begin a fairly long growth. This process may extend for a whole month, right up to the next meeting of the Federal Committee on Open Market Operations. However, if the European Central Bank does not say anything again, but only repeats the words about the need to maintain the stability of economic recovery and the like, then there is no need to talk about any growth of the euro. The trend to strengthen the US dollar will simply resume.

Refinancing rate (Europe):

This image is no longer relevant

The EUR/USD pair is moving in a corrective course from a local low of 1.1121, which resulted in the strengthening of the euro by more than 200 points. The local overbought status has already been received, but this did not lead to a reversal. There is currently a stagnation, which is due to the upcoming event. It can be assumed that a new wave of speculation will emerge very soon. The levels of 1.1240 and 1.1335 will act as signal levels, whose breakdown will indicate the subsequent path of speculators.

This image is no longer relevant

The GBP/USD pair approached the resistance level of 1.3600, where there was a reduction in the volume of long positions. This led to a price pullback due to the high overbought level. So, an increase in downward interest may occur after the price is kept below the level of 1.3530. At the same time, the prolongation of the upward cycle will be considered after holding the price above the level of 1.3600.

This image is no longer relevant

Mark Bom,
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
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

How to Trade the GBP/USD Pair on May 13? Simple Tips and Trade Analysis for Beginners

Analysis of Monday's Trades 1H Chart of GBP/USD On Monday, the GBP/USD pair also collapsed sharply, though it's more accurate to say the U.S. dollar showed strong growth. In recent

Paolo Greco 05:59 2025-05-13 UTC+2

How to Trade the EUR/USD Pair on May 13? Simple Tips and Trade Analysis for Beginners

Analysis of Monday's Trades 1H Chart of EUR/USD On Monday, the EUR/USD currency pair plunged. Traders have likely gotten used to the idea that the U.S. dollar can't show strong

Paolo Greco 05:59 2025-05-13 UTC+2

Trading Recommendations and Analysis for GBP/USD on May 13: A Sudden Turn

On Monday, the GBP/USD currency pair experienced a significant decline, which was driven by progress in negotiations between China and the United States. The logic here is strikingly simple

Paolo Greco 05:08 2025-05-13 UTC+2

Trading Recommendations and Analysis for EUR/USD on May 13: Unexpected Origins

The EUR/USD currency pair showed strong downward movement on Monday, which hasn't happened in quite a while. However, the reasons behind the sharp and sudden surge in the U.S. dollar

Paolo Greco 05:08 2025-05-13 UTC+2

How to Trade the GBP/USD Pair on May 12? Simple Tips and Trade Analysis for Beginners

Analysis of Friday's Trades 1H Chart of GBP/USD On Friday, the GBP/USD currency pair exhibited a tendency to rise. As we can see, first of all, the pair once again

Paolo Greco 06:50 2025-05-12 UTC+2

How to Trade the EUR/USD Pair on May 12? Simple Tips and Trade Analysis for Beginners

Analysis of Friday's Trades 1H Chart of EUR/USD On Friday, the EUR/USD currency pair traded in a fairly technical and predictable manner. The US dollar failed to build

Paolo Greco 06:50 2025-05-12 UTC+2

Trading Recommendations and Analysis for GBP/USD on May 12. Flat Trend Not Over

On Friday, the GBP/USD currency pair initially exited its sideways channel but quickly and confidently recovered to the Senkou Span B line. From a technical standpoint, the flat range could

Paolo Greco 03:48 2025-05-12 UTC+2

Trading Recommendations and Analysis for EUR/USD on May 12. The Euro Is in No Hurry to Fall, and the Dollar to Rise

The EUR/USD currency pair could not continue its downward movement on Friday. This is not surprising, as any dollar growth is achieved with significant effort. Regardless of the macroeconomic

Paolo Greco 03:48 2025-05-12 UTC+2

GBP/USD: Trading Plan for the U.S. Session on May 9th (Morning Trade Review)

In my morning forecast, I highlighted the 1.3283 level and planned to make market entry decisions based on it. Let's look at the 5-minute chart and analyze what happened

Miroslaw Bawulski 19:05 2025-05-09 UTC+2

EUR/USD: Trading Plan for the U.S. Session on May 9th (Review of Morning Trades)

In my morning forecast, I drew attention to the 1.1257 level and planned to base entry decisions around it. Let's look at the 5-minute chart and analyze what happened there

Miroslaw Bawulski 19:01 2025-05-09 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

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.