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The GBP/USD pair traded on a roller coaster all day on Wednesday. Of course, one could expect such a movement from the pair ahead of the results of the Federal Reserve meeting. However, it happens differently every time. Sometimes the markets, confident in certain decisions of the central bank, start trading the pair early in the morning. Sometimes, like yesterday, they don’t know what to expect from the Fed, so all day there are boring movements that lead to nothing. On Wednesday, there were such a huge number of possible scenarios on the market that traders did not guess on the coffee grounds and decided to just wait for the results of the meeting. Everything that happened during the day cannot be analyzed, since the volatility was only 33 points. That is, less than the euro/dollar pair! Not a single trading signal was formed, although the price came close to the extreme level of 1.3489 twice. Well, in the evening, during the announcement of the meeting’s results, the interest rate decision and Fed Chairman Jerome Powell’s press conference, it definitely did not make sense to take risks. At least a couple of buy signals were formed for the euro currency during the day, which could be beaten in conjunction with the evening events. There was no such thing for the pound, so yesterday was a waste for traders. It remains only to draw final conclusions on the Fed meeting. Market participants will return to the usual trading mode by tomorrow.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. January 27. It is too early to make global changes in monetary policy.
Overview of the GBP/USD pair. January 27. Scotland Yard is investigating ‘coronavirus parties’.
Forecast and trading signals for EUR/USD on January 27. Detailed analysis of the movement of the pair and trading transactions.
On the hourly timeframe, the pound/dollar pair as a whole maintains a downward trend. Whatever the movement over the next 10-20 hours, it should be understood that it is “fundamental”. The markets can quite calmly react by buying the pair by 100-150 points, but the next day the price can go exactly the same amount down. That’s why we always say that after such important events, you need to let the market relax a bit. Usually a day is enough for this. Therefore, today it is possible to continue trading the pair from the levels and lines, but it is better to make final technical conclusions tomorrow. We highlight the following important levels on January 27: 1.3362, 1.3439, 1.3489, 1.3598-1.3607, 1.3667. The Senkou Span B (1.3639) and Kijun-sen (1.3547) lines can also be signal sources. Signals can be “bounces” and “breakthroughs” of these levels and lines. It is recommended to set the Stop Loss level to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. No fundamental or macroeconomic events are scheduled for Thursday in the UK again. On the other hand, an important GDP report for the fourth quarter will be published in America. We believe that its actual value may be weaker than the forecast, which may provoke a fall in the US currency after its publication. However, it will also be important to take into account what position the US dollar itself will be in by that time. If, with a weak GDP report, it will be in a state of falling against the euro, then there may not be an additional fall. And vice versa. It will also be possible to pay attention to reports on applications for unemployment benefits and orders for long-term goods in the United States, but they are much less likely to attract the attention of traders.
Explanations for the chart:
Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.
Support and resistance areas are areas from which the price has repeatedly rebounded off.
Yellow lines are trend lines, trend channels and any other technical patterns.
Indicator 1 on the COT charts is the size of the net position of each category of traders.
Indicator 2 on the COT charts is the size of the net position for the non-commercial group.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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