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31.01.202210:15 Forex Analysis & Reviews: GBP/USD analysis and outlook for January 31, 2022

Hi, dear traders!

Last week, the US dollar advanced against all major currencies, including the pound sterling. USD found support in the clearly hawkish position of the Federal Reserve, which concluded its meeting on Wednesday. Jerome Powell's statements about US economic growth were followed by strong US GDP data for the fourth quarter of 2021.

There are several important events on this week's economic calendar - the Bank of England's monetary policy decision on Thursday and US labor market data on Friday. There are no notable data releases today, and the pair's trajectory will be influenced solely by market sentiment and technical factors.

Weekly

Exchange Rates 31.01.2022 analysis

According to the weekly chart, GBP/USD finished last week's trading below the Ichimoku cloud. This is a strong bearish signal, and if the pair does not close within the cloud this week, it could fall even further. At this point, GBP/USD faces very strong resistance at the lower boundary of the Ichimoku cloud, as well as the black 89-day EMA line near 1.3460 - if the pair retraces towards it, it would allow opening short positions. The quote found support in the orange 200-day EMA line - a breakout below the EMA line would open the way towards 1.3170.

Daily

Exchange Rates 31.01.2022 analysis

According to the daily chart, GBP/USD fell into the Ichimoku cloud, breaking through the 50-day SMA line in the process. On Friday, the pair failed to break above the 50 MA - if it does not regain this level and 1.3440, it could continue to slide down towards the lower boundary of the Ichimoku cloud in the strong technical area of 1.3320-1.3300.

Outlook for GBP/USD

The fundamental factors, such as the hawkish Fed policy and strong macroeconomic US data, currently favor the US dollar, but this week's economic events could change the situation. On the technical side, opening short positions is the best course of action - they could be considered after GBP/USD performs a corrective move into the 1.3415-1.3460 area.

Good luck!

*Phân tích thị trường được đăng tải ở đây có nghĩa là để gia tăng nhận thức của bạn, nhưng không đưa ra các chỉ dẫn để thực hiện một giao dịch.

Ivan Aleksandrov,
Analytical expert of InstaSpot
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