GBP/USD bid then offered supported by 200 1hr sma

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 27, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Guatemala) - GBP/USD is slightly higher on the FOMC and Fed's unanimous no change.

    The Fed is looking down the road and a short-term volatility in the markets is not going to change their view. However, the statement explained that they are closely monitoring global financial and economic developments.

    They are aware of the strong dollar and how this may continue to affect inflation and they changed the format of the statement, noting that energy and slowing growth are a cause of concern pointing towards inventories and net exports (we will wait for Q4 GDP on Friday). They also dropped the balance of risks statement by simply taking it out. All in all, repeated that the economy will only warrant gradual rises.

    GBP/USD, at time of writing and 10 minutes post the release of the statement, is headed lower instead while markets have not reacted in any great was to the FOMC with the majority of the outcome already expected. We will now turn heads to Fridays GDP Q4 on Friday for further impetus. GDP is expected to have grown 2% Y/Y and you can watch live coverage at FXStreet here.

    GBP/USD levels

    Technically, the 200 sma on the hourly sticks is supporting the pair still at 1.4246. A break of yesterday's lows at 1.4171 opens 1.4083 prior low and then the 1.3502 January 2009 low comes into focus again on the wide.

    On the upside, GBP/USD has key resistance at the 20 dma at 1.4434 ahead of the Fibonacci resistance at 1.4492. This is guarding the 1.4568 April 2015 low. A recovery needs to get past the accelerated downtrend of 19th Jan business at 1.4338 first.
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