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Forex trading plan for January 27

 By Elizabeth Belugina

The main event on Wednesday will be the Federal Reserve’s rate decision and statement at 19:00 GMT. The central bank is expected to keep monetary policy unchanged. The most important thing will be how the Fed regards financial market situation, which has considerably changed since the regulator increased rate in December. The Fed will likely acknowledge the fact that the external picture has deteriorated, but there won’t be considerable changes in the statement. Such outcome will make traders buy US dollar on the pullbacks to the downside.

EUR/USD failed to break above 1.0860, which guarded the way to 1.0950. We are focused on 1.0780, ahead of 1.0700. GBP/USD is fluctuating around 1.4228. The Bank of England’s Governor Carney said that Britain may actually cut interest rates. This is negative for the cable, which should return lower, to the minimums around 1.4100.

USD/JPY still has to settle above 118.70 to get to 119.70/120. The greenback may come under pressure before the Fed’s meeting, but we’ll be looking for the buying opportunities. The upcoming meeting of the Bank of Japan on Friday will provide support for the greenback at 117.60/00. AUD/USD has to rise above 0.7045 to confirm reversal pattern. Support is at 0.6935/20 ahead of 0.6830. Australia will release inflation figures at 00:30 GMT. Lower CPI growth, which will be negative for Aussie. 

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