The EUR/USD pair moved as if it was at a wake on Wednesday. The market did not show any activity during the day. In this review, we will not consider the pair's movements that occurred after the results of the Federal Reserve meeting were announced. Simply because it was too late for traders to work them out at that time. Moreover, we do not recommend entering the market during such important events. It is usually impossible to predict traders' reaction to them. The pair may start moving in one direction, but after half an hour it will start a strong movement in the opposite direction. Such movements are risky, so we do not recommend practicing them. The only thing that could be done was to open a long position on one of the two buy signals that were formed during the day, set a Stop Loss below the level of 1.1274 and hope that the pair will trade in the evening and at night only up. Given what the market's expectations were regarding the Fed, it was hardly possible to consider such a deal promising. As a result, we can only consider the two buy signals that were formed during the day. For the first time, the price bounced from the extreme level of 1.1274 and managed to go up about 12 points, after which it returned to the level of 1.1274. This was followed by a second rebound from this level, after which the price went up even less. Thus, the long position could be closed a couple of hours before the release of the results of the Fed meeting or, as we have already said, put a Stop Loss under the level of 1.1274 and hope for the growth of the European currency.
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 GBP/USD on January 27. Detailed analysis of the movement of the pair and trading transactions.
The technical picture continues to indicate a downward trend on the hourly timeframe. We recommend that traders reassess the technical picture no earlier than Thursday evening, as the market needs to calm down after the Fed meeting first. Recall that the market reaction after such an important event can be observed the next day after it, since the Europeans were deprived of the opportunity to work it out. However, even yesterday, the price was already overcoming the downward trend line, which signaled the possible imminent end of the downward trend. On Thursday, we allocate the following levels for trading - 1.1192, 1.1234, 1.1274, 1.1360, as well as the Senkou Span B (1.1384) and Kijun-sen (1.1315) lines. The lines of the Ichimoku indicator may change their position during the day, which should be taken into account when searching for trading signals. Signals can be "bounces" and "breakthroughs" of these levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price went in the right direction of 15 points. This will protect against possible losses if the signal turns out to be false. Nothing interesting planned in the European Union on January 27. But in America - there will be a rather important event again. This time, the release of the GDP report for the fourth quarter of 2021. It is expected that the economy grew by 5.3% during this period, although it added only 2.3% a quarter earlier. We believe that the actual value may be much lower than 5.3% q/q. Data on applications for unemployment benefits, which provoked a fall in the dollar a week earlier, and a report on orders for long-term goods will also be published.
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.