Relevance up to 22:00 2022-01-26 UTC+00
In today’s review of the GBP/USD currency pair, we will do without any preludes there in the form of another funny, and maybe even ridiculous statement by British Prime Minister Boris Johnson. This now has absolutely no meaning for what is happening and will happen in the evening on the foreign exchange market and world trading platforms. Naturally, the results of the two-day extended meeting of the US Federal Reserve System (FRS) and the subsequent press conference of Federal Reserve Chairman Jerome Powell will be at the forefront today. Since the federal funds rate is likely to remain in the range of 0.00-0.25%, the main attention of bidders, as noted earlier, will be focused on the rhetoric of the speech of the head of the Fed. If Powell shows a slightly softer tone, the US dollar will have a hard time, the “American” will most likely fall under the wave of sales. If Powell retains the “hawkish” attitude and even more so strengthens it, the US currency will gain a second wind and will strengthen its position over its main competitors. This is the disposition on the eve of the results of the Fed meeting and the speech of the head of this department. Now let’s take a closer look at the technical picture of the GBP/USD currency pair.
Looking at yesterday’s candle with a particularly long lower shadow, you realize that bulls by the pound do not even think of throwing out a white flag, that is, capitulate. After falling to the level of 1.3435, the players on the increase woke up and began to actively reduce the losses incurred before. It is characteristic that this level for the second day in a row restrains the quote from declining. As a result, although the pair ended the session on January 25 within the Ichimoku indicator cloud, it formed a candle with a bullish body and a very long lower shadow. Usually, such candles are harbingers of subsequent growth. So we’ll take a look at it today. Judging by the technical picture, the US dollar may face serious problems that will result in its decline. Well, the answer to what will happen will be given only by the outcome of the two-day Fed meeting.
In any case, the target of the possible growth of GBP/USD can be considered the 1.3585 mark, where the orange 200 exponential moving average and the red Tenkan line of the Ichimoku indicator converged. Naturally, such a course of trading is possible only if the black 89 exponential moving average passes up, which is at the level of 1.3530. You understand that on such important informative days, such as the extended meeting of the Fed, or rather its results, giving some unambiguous trading recommendations for opening deals is like tossing a coin. However, for some reason, the author believes in the growth of the British currency against the US dollar. It seems that Fed Chairman Jerome Powell will be more restrained today and refrain from expressing “hawkish” comments. For those who agree with this opinion, I recommend considering opening long positions near a fairly strong technical level of 1.3485 or slightly below this mark. I recommend those wishing to sell GBP/USD to take a closer look at the 1.3523 and 1.3555 marks, but only if the ups to the listed levels are short-term, and the general movement does not have a pronounced direction.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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