FX.co ★ Trading plan for EUR/USD and GBP/USD on January 16

Dollar suddenly rose, surprising market players. The reason appears to be the media reports that said the ECB will cut the refinancing rate four times this year, and by the end of the year, it would drop to 3.0%.

The rally may continue as forecasts say the unemployment rate in the UK will rise from 4.2% to 4.3%. Such data will weaken demand for pound, dragging euro along with it.

Despite the recent activity in dollar positions, EUR/USD continued moving sideways, at 1.0900/1.1000. However, the distribution of trading forces within the flat indicates a bearish sentiment, so a further decline may occur, leading to a breakdown of 1.0900.

GBP/USD also trades in a sideways channel, at 1.2600/1.2800. This led to a rebound from the upper boundary towards the lower boundary. A stabilization of the price below 1.2700 will push the pair to 1.2600.