27.01.202204:33 Forex Analysis & Reviews: Overview of the GBP/USD pair. January 27. Scotland Yard has taken up the investigation of "coronavirus parties".

The GBP/USD currency pair maintained a downward mood at the beginning of the next week but did not fall all the time. Naturally, the key event of the week was also to be the Fed meeting and its results. However, we have already talked about them in other articles, so it will not be repeated here. The main thing that is required now is to calm the market after summing up the results of the Fed meeting. The pair could be anywhere by morning. The reaction of the markets can be observed for another day after the Fed announces the results of the meeting. Therefore, we believe that first, we need to wait for calm, and only then consider the technical picture and draw conclusions. Now you can pay attention to a more senior timeframe – the daily one. Over the past two weeks, the pound/dollar pair has fallen to the Kijun-sen and Senkou Span B lines of the Ichimoku indicator, which we consider to be a very important event. Now, these lines must either be overcome or else withstand the onslaught of bears. In the first case, the downward movement will continue, as we expect, in the second - in the medium term, the upward trend will resume with the prospect of the pair growing above the 37th level. We would like to note that even the last round of growth to the level of 1.3740 did not lead to an exit beyond the previous local maximum. There is still a downward trend in 2021. Also in favor of further dollar growth is the serious attitude of the Fed to tighten monetary policy during 2022. The only disappointing news is still coming from the UK.

Scotland Yard has taken over the investigation of Boris Johnson's parties.

In the UK, all attention is still focused on Boris Johnson. To be honest, he talks about scandals in the UK every day, but there is no other serious and important news coming from the UK right now.

Johnson probably wants to resolve another conflict in the same way. This time it's internal. The fact is that the investigation of the "coronavirus parties" that were held at 10 Downing Street was undertaken by Scotland Yard. The agency did not want to take up this case for a long time since in principle it prefers not to take cases of violations of "coronavirus" restrictions. Moreover, in this case, we are talking about violations in 2020 or 2021. Police spokeswoman Cressida Dick has already stated that an investigation is underway, but this does not mean that the defendants, in this case, face punishment. Simply put, most likely, Scotland Yard "will not find" anything criminal in the actions of Boris Johnson and his colleagues. Well, or write him a fine of 100 pounds sterling. However, it's not about the fine. The point is that the authorities do not care about the rules, which they have established. It turns out that ordinary citizens could not visit each other, gather in companies and generally leave the house, and at the same time government officials were having fun with might and main, it became public knowledge, and now they understand absolutely everything that Johnson and the company are just trying to shift the blame to someone else and get off with minimal punishment or fright. Thus, this case is likely to simply be hushed up, but the opposition will be reminded about it at the next parliamentary elections. Johnson and his fellow party members continue to lose ratings, as their leader too often gets into various kinds of scandals. This could cost the Conservative Party a majority.

The average volatility of the GBP/USD pair is currently 71 points per day. For the pound/dollar pair, this value is "average". On Thursday, January 27, thus, we expect movement inside the channel, limited by the levels of 1.3440 and 1.3582. The reversal of the Heiken Ashi indicator downwards signals the resumption of the downward movement.

Nearest support levels:

S1 – 1,3489

S2 – 1.3428

S3 – 1.3367

Nearest resistance levels:

R1 – 1.3550

R2 – 1.3611

R3 – 1.3672

Trading recommendations:

The GBP/USD pair on the 4-hour timeframe has been correcting for the last two days to the moving average. Thus, at this time it is recommended to open new short positions with targets of 1.3428 and 1.3367 after the reversal of the Heiken Ashi indicator down. It is recommended to consider long positions if the pair is fixed above the moving average line, with targets of 1.3582 and 1.3611, and keep them open until the Heiken Ashi indicator turns down.

Explanations to the illustrations:

Linear regression channels - help determine the current trend. If both are directed in the same direction, then the trend is strong now.

Moving average line (settings 20.0, smoothed) - determines the short-term trend and the direction in which trading should be conducted now.

Murray levels - target levels for movements and corrections.

Volatility levels (red lines) - the likely price channel in which the pair will spend the next day, based on current volatility indicators.

CCI indicator - its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.