(DAILY NOTION) GBP/USD Possible Break Above 1.3750, Next Mover: Fed Rate Decision
Illustration photo of GBP/USD daily chart from Tradingview
The GBP/USD price momentum is accelerating even as the UK economic situation continues to get worse. The GBPUSD rose to 1.3750, which is the highest level in more than two-and-a-half years. Today, the focus will be on the tone of the Federal Reserve.
The GBP/USD price continued its upward momentum after the relatively strong jobs numbers released yesterday. The data showed that the UK unemployment rate rose at a slower rate than expected. Also, because of the shopping holiday, employers boosted their employees' wages faster than expected.
Further, the number of people who filed for claims increased at a slower pace than anticipated. These numbers mean that the BOE will not signal negative rates when it meets on February 10. Still, the UK economy will get worse due to the ongoing lockdowns.
The next key mover for the GBP/USD will be the FOMC decision that will come out later today. A hawkish Fed will likely see the pair paring-back some of the current gains. Also, a dovish Fed will possibly see it continuing with the current uptrend. The GBP/USD price will also react mildly to the U.S. durable goods orders.
The four-hour chart shows that the GBP/USD is at an important level. It is on the same level where it was on January 21. Also. it is above the 15-day and 25-day exponential moving averages. It is also being supported by the ascending trendline that is shown in blue. Therefore, in my view, in the case of a hawkish Fed, the pair will attempt to retest the vital support at 1.3612. If the bank gets dovish, the GBP/USD will break-out higher.
FOLLOWME GBP/USD Overall Sentiment (As of 04:35 p.m., Jan 27, 2021).
Short - 430.94%
Long - 69.06%
For information please refer to Crispus Nyaga.
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