GBP/USD Clears Out Stops After FOMC

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GBP/USD Clears Out Stops After FOMC

After today’s FOMC statement, the market sold the US Dollar across the board. Let’s take a look at the GBP/USD’s reaction and reassess the technical picture.

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GBP/USD was making new lows on the year before the FOMC statement tagging 1.4635 just before the event risk. Afterwards, it popped to 1.5165. Then, if fell back below 1.50. The technicals in the 4H chart can still be considered bearish especially with the RSI holding below 60 for the most part.

The daily chart also shows a bearish market. Even though price broke a falling trendline in the 4H chart and is showing a bullish engulfing candle, we should not put too much weight on this initial reaction.

Watch what happens in the next couple of sessions. Inability to push above 1.50 and falling below 1.49 should expose the 1.4635 low with risk of extending to 1.46. If price can close the week above 1.50, we might see some further short-term correction towards 1.52.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.