GBPUSD

As we approach the first month of the new year, a critical flow of data is beginning in global markets. The U.S. Federal Reserve (Fed) is holding its first meeting of the year today, while the European Central Bank (ECB) decision and the U.S. fourth-quarter growth data will be announced tomorrow. On Friday, the Fed's inflation indicator, the PCE (Personal Consumption Expenditures), will be monitored. With these developments, the Dollar Index could increase volatility in the EUR/USD and GBP/USD pairs. While two interest rate cuts are expected from the Fed within the year, no change in rates is anticipated during this meeting. Fed Chairman Powell's guidance regarding monetary policy strategies from the Trump era will be the main focus.

The classic Dollar Index presents a positive outlook above the 233-day average (104.80), while movements below the 34-day average (107.73) keep short-term reaction thoughts in play. In the GBP/USD pair, a trend review has begun with the breach of the 55-period exponential moving average (1.2360). It is crucial to closely monitor both averages, as movements at these levels could be decisive for the market. Levels of 1.2525 – 1.2565 or 1.2315 – 1.2270 may occupy the agenda in the coming days.