The British pound was bullish before the Fed announcement, trading close to the 200 EMA around 1.3515.
Interest rates remained at 0.25% as expected. Although the Fed did not say explicitly that it would raise rates in March, it did say (as expected) that it would soon be time to raise interest rates. The Fed reiterated that its QE program will end in March
Following the Fed's announcement, the British pound fell below the 200 EMA and kept intact its downtrend channel that was formed since January 13.
Another factor weighing on the pound is the recent political events in the UK that prevented investors from opening aggressive bullish positions around the GBP/USD pair.
Strong resistance around 1.3500 coupled with the 200 EMA, 21 SMA and downtrend channel prevented the pound from consolidating above 1.3530. Now we see that it has returned to the weekly low and is approaching the support at 6/8 Murray.
The eagle indicator is giving a negative signal and GBP/USD is likely to find support around 6/8 Murray located at 1.3427. Around this area, we may have a buying opportunity with targets at 1.3494.
It is prudent to wait for strong buying around 6/8 Murray before confirming that the corrective pullback from the area of 1.3750 is over.
On the other hand, if the downward pressure prevails and the British pound breaks the support level of 1.3400, the fall is likely to continue towards 5/8 Murray located at 1.3305.
Support and Resistance Levels for January 27 - 28, 2022
Resistance (3) 1.3509
Resistance (2) 1.3476
Resistance (1) 1.3451
----------------------------
Support (1) 1.3395
Support (2) 1.3358
Support (3) 1.3305
***********************************************************
Scenario
Timeframe H4
Recommendation: buy above o buy if rebound
Entry Point 1.3427
Take Profit 1.3494; 1.3511 (200 EMA)
Stop Loss 1.3395
Murray Levels 1.3671 (8/8) 1.3549 (7/8) 1.3427 (6/8) 1.3305 (5/8)
***************************************************************************
