The US dollar was hit by speculators yesterday, which resulted in its sale relative to close competitors.

• The EUR/USD pair rose around 30 pips (+ 0.20%)
• The GBP/USD pair rose around 70 pips (+ 0.42%)

In terms of the economic calendar, the UK labor market data was published, where the unemployment rate rose to 5.0%, against the forecast of 5.1%. Meanwhile, employment in the country declined by 88,000, which is less than the expected 100,000. The average wage, in turn, increased by 3.6%.

The data may seem positive if we look at it for the first time. However, it should be recalled that the unemployment rate is at its highest level since 2016, and 828,000 people have lost their jobs since the crisis began.

Wage growth increases only for those who were fired or laid off.

What happened on the trading chart?

The GBP/USD pair felt a slight pressure during the release of statistics. As a result, the pound weakened by about 30 points. After that, speculators entered the market, caught the quote and moved it to the high of the medium-term trend, locally updating it. A general analysis of the currency market will show that the impulse for the market movement was the sell-off of the US dollar.

The EUR/USD pair demonstrated simultaneous fluctuations yesterday, where an attempt to continue the correctional course was made at first, but after that, everything returned to its place.

Trading recommendations on EUR/USD and GBP/USD for January 27, 2021

Today, everyone is focused on the results of the Fed's two-day meeting, where the key rate is assumed to remain unchanged at the level of 0-0.25%. Investors are most interested in the issue of cash injections, which is what Joe Biden is pushing so hard in terms of supporting the economy. It should be understood that supporting the economy in this case is the same as the program of quantitative easing, which is a negative factor for the national currency.

If we consider experts' expectations, the Fed members may take a neutral position, which, on the contrary, will have a positive impact on the US dollar.

• 19:00 Universal time - results of the Fed meeting
• 19:30 Universal time - Fed's press conference

If we analyze the current trading chart of the GBP/USD, it can be seen that the quote has clamped itself in a narrow range of 1.3720/1.3750, at the very peak of the medium-term trend.

If we consider the natural basis associated with the trend's high, then a price rebound in the opposite direction will be likely. In this case, positions to sell will be considered below the level of 1.3715, in the direction of 1.3650.

The upward movement, in turn, is considered in terms of prolongation of the medium-term trend. In order to confirm the signal, the price should consolidate above 1.3750 in the four-hour or daily time frame.

As for the current trading chart of the EUR/USD, we can see that the quote follows the previous limits of 1.2125/1.2190, periodically breaking through them.

A full-fledged movement relative to the main coordinates will likely occur. If this plan is fulfilled, we can consider the sell target at 1.2105 and buy target at 1.2200.