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.
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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