The US dollar was one of the most attractive assets for investment yesterday. Its value was actively rising, which was extremely noticeable.

• It increased by more than 0.45% against the euro in the EUR/USD pair, with a maximum growth of + 0.85% during the European session.
• It increased by more than 0.43% against the pound in the GBP/USD pair, with a maximum growth of + 0.69% during the European session.

In terms of the economic calendar, the Federal Open Market Committee (FOMC) held their scheduled meeting, where the regulator expectedly left the key rate unchanged in the range of 0-0.25%. Following the minutes, the Fed will use all available tools to support the US economy. The monetary policy will remain stimulating, depending on the economic situation.

On the one hand, the regulator took a "dovish" position by doing nothing, but on the other hand, it did nothing wrong. Thus, investors are satisfied with this position. The US dollar continues to strengthen amid a high oversold over a fairly long period.

What happened on the trading chart?

The EUR/USD pair showed an active downward interest during yesterday's European session. As a result, the rate of the euro declined to the January support area of 1.2050/1.2070, where the volume of short positions (sell positions) naturally reduced, which was followed by a price rebound.

The GBP/USD pair found a resistance level again in the area of the local high of the mid-term upward trend, where market participants failed to break through the coordinates of 1.3750. Instead, there was an expected rebound, which led to an immediate decline in the market.

Trading recommendations on EUR/USD and GBP/USD for January 28, 2021

The first estimate of the United States GDP in the fourth quarter will be published today, where the economy is forecast to grow by 4.2%. This is a positive factor that can lead to the growth of the US currency.

At the same time, US weekly data on claims for unemployment benefits will be published as well, where their volume is expected to decline.

• Volume of initial applications for benefits may decline from 900 thousand to 875 thousand.
• Volume of repeated applications for benefits may remain at the same level – 5,054 thousand.

USA 13:30 Universal time - GDP and applications for unemployment benefits

If we analyze the current trading chart of EUR/USD, it can be seen that the quote is in the pullback stage from the support area of 1.2050/1.2070, where the variable resistance level is known in the history of coordinates 1.2130. We can assume that market participants will be within the range of 1.2080/1.2130 for a while, where the method of analyzing the fixing points relative to the control coordinates of 1.2050 and 1.2130 will be considered as the main tactic.

It is noteworthy that holding the price outside of a particular coordinate must be confirmed by fixing on the H4 time frame.

As for the current trading chart of the GBP/USD, it can be seen that there is still a downward interest in the market, where it is not excluded to move in the direction of this week's local low (1.3609) if the price is kept below 1.3650.

An alternative scenario for the market development will be considered if the price fluctuates along the previously known sideways course of 1.3650/13750.