Trading plan for January 29

The economic calendar for today is highlighted by the two important events: the release of CB consumer confidence level for the US and the Brexit vote.

The level of consumer confidence will be released at 17:00 MT time. According to the forecast, it will reach 125 points. If the actual level is higher, the USD will get stronger.

As for the Brexit vote, today the Parliament will vote on amendments to the current Theresa May Brexit deal with the EU. The key issue, for now, is still connected with the solution on the Irish backstop. Another amendment suggests the parliament to pass a bill requiring Theresa May to seek an extension to the Brexit process until December 31, if the deal is not reached before February 26. If the parliament agrees on some of the changes with the government, the GBP will get positive momentum. That is why it’s highly important to follow the updates on that matter. 

Let’s look at the key levels of EUR/USD and GBP/USD.

On the daily chart of EUR/USD, we can see that the pair has left the downward channel this week and is heading towards the strong resistance at 1.1453, which lies near the 100-day MA. However, according to Parabolic SAR the trend is still bearish, that is why bears may take back their positions.

On the H4, the pair has been moving up since the beginning of the trading session. If the level of consumer confidence is higher, that the expectation, the pair will fall. The first support lies at 1.1425. If this level is broken, the next support lies at 1.1402.  If bulls manage to pull the pair higher, they will face the resistance at 1.1453. The next resistance is placed at 1.1462.

Let’s look at the daily chart for GBP/USD pair. We can see the current uptrend. RSI has tested the overbought zone, which means that the pair may continue to fall. The strong support lies at 1.3081, close to 200-day MA.

On the H4, the pair has been trading sideways since the beginning of the day. That means traders are cautious ahead of the Brexit vote. In case of the breakthrough on the Brexit deal, bulls will pull the pair higher to the resistance at 1.3188. If this level is broken, the next resistance lies at the 1.3218 level. If there are more uncertainties, bears will break the current support at 1.3140 and fall towards the next support at 1.3081.

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