empty
 
 
27.01.2022 08:32 AM
GBP/USD breaking forecast for January 27, 2022

So, the Federal Reserve left the interest rate unchanged. Amid all speculation in this regard, a brief pullback should have taken place in the forex market, and the greenback should have strengthened. However, it did not happen. Instead, the US dollar showed steady growth. All in all, the regulator adopted a more aggressive stance on monetary policy. First of all, it decided to speed up the tapering of the QE program. "Beginning in February, the Committee will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage-backed securities by at least $10 billion per month," the FOMC statement said. In other words, the pace of tapering was increased twice. The regulator also hinted that the first rate hike could take place already in March. Inflation used to be the main reason for taking measures. Yesterday, the central bank also mentioned the jobs market, saying it had stabilized enough. If the state of the jobs market continues to improve further, overheating risks will grow. If so, the consequences will be even more devastating than from rising inflation. So the Federal Reserve is clearly concerned about this issue, which means it will not wait and postpone rate hikes until markets are ready for them. These markets now have only a month and a half. Consequently, the US dollar will continue strengthening.

The pound/dollar pair resumed its downward slide after rebounding slightly. As a result, it updated the swing low as of January 25, indicating the likelihood of a stronger dollar.

The Relative Strength Index (RSI) is moving below the 30/50 range, signaling mounting bearish interest.

The Alligator indicator shows the crossover of moving averages (MA) on the 4-hour chart, indicating the end of the bullish cycle. The indicator confirms a reversal signal on the 4-hour chart.

According to the daily chart, the price has retraced down by 61% after the end of the bullish cycle.

Outlook:

Traders expect the bearish trend to continue. Consolidation below 1.3400 on the daily chart could lead to an increase in short positions. If so, the price may head towards 1.3320 and 1.3200.

Speaking of complex indicator analysis, technical indicators are signaling to sell the instrument in the short and intermediate terms as well as intraday due to the bearish market.

This image is no longer relevant

Dean Leo,
Analytical expert of InstaForex
© 2007-2024
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
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback