The last week of January is upon us, and this week in contrast to previous weeks is rather calm in terms of fundamental news. This week may help traders end the first month of 2021 on a good note.
Aside from the FOMC rate decision on Wednesday, this week’s fundamental schedule is rather tame. This may be beneficial for the Dollar which has seemed to neglect and often move opposite of the economic data. At the current moment, the Dollar is battling 90.40 to push higher to 90.72. A daily closure above this level should result in further Dollar strength. A failure to do so may send the DXY back to 90.15.
One major that is developing a trade setup is GBPUSD. This pair is currently rejecting the current daily range and is attempting to clear last week’s low. The only hurdle that is stopping further downside momentum is the lack of movement in the DXY. Traders can explore two options. Either wait for price to breach last week’s low to go short, or wait for price to clear the daily range to go long.
It will be interesting to see and hear what the FOMC has in store for the current and future economic outlook for the United States. A dovish tone may lead to short-term weakness but may result in stimulating the economy and future strength. Traders will have time during the New York open to close any open positions before the conference at 2:30 PM EST.