Yesterday's trading on the foreign exchange market was quite uncertain and nervous in anticipation of the results of the two-day meeting of the Federal Reserve, the publication of updated economic forecasts, and the press conference of the Chairman of the Federal Reserve, Jerome Powell. We will talk about this in more detail in the technical part of the review. However, for now, let us briefly talk about what can be expected from the Fed today. There is no doubt that the US Federal Reserve will keep the main interest rate in the range of 0.00%-0.25%. Based on this, all the attention of investors will be focused on the updated forecasts for the world's leading economy and the rhetoric of the head of the Federal Reserve, Jerome Powell. I believe that it is the press conference of the head of the Federal Reserve that will have the main impact on the dynamics of the US currency.
Given the recent optimism of US President Joe Biden about the vaccination campaign against COVID-19 and the country's gradual return to its usual way of life, it is impossible to completely exclude that the Fed chairman will pick up such an optimistic tone of his presidency. His speech will be held in a more pronounced "hawkish" direction. However, since the Fed is an independent agency whose primary goal is price stability, I dare assume that Powell's speech will be more cautious, and he will refrain from making cap-making moods. In my personal opinion, the head of the Fed will once again make it clear that it is still too early to start tightening monetary policy. It is necessary to bring to mind the vaccination company in the country and very carefully monitor the incoming macroeconomic statistics. If we hear such statements, it is unlikely that they will lead to a strengthening of the US currency, although everything will depend on the specific details and market reaction.
Daily
At yesterday's trading, the GBP/USD currency pair showed multidirectional dynamics, which is quite understandable and even natural on the eve of such an important event as the extended meeting of the Federal Reserve. After the initial drop to the strong technical level of 1.3860, where the red line of the Tenkan Ichimoku indicator also runs, the pair found strong enough support there to turn in the opposite direction. Despite the growth, the previous maximum values at 1.3927 were not rewritten, and this resistance level was not even retested for a breakdown since the price did not reach it.
Today, at the end of the article, the pound/dollar pair is under selling pressure and has already fallen to 1.3861. However, it has not yet reached yesterday's minimum values at 1.3857. On days like today, it is always difficult to give any specific trading recommendations. First, it is unclear what tone Jerome Powell's press conference will take. Secondly, the reaction of market participants can be different and even completely unpredictable. Based on this, it remains to consider the technical aspects for opening positions, but at such important events, the technique is often broken.
Nevertheless, purchases can be regarded as after declines in the area of 1.3860-1.3840 and sales from the strong resistance zone of 1.3900-1.3930. At the same time, a change in the initial movement to the opposite is not excluded, so after the Fed, I do not recommend staying in the market for a long time. It is better to take a small profit and get out on time than to stay for a long time and suffer significant losses.
