Euro and pound continued to rise after the UK reported another increase in its consumer price index. Economists had expected a slowdown in growth, but what happened was that prices did not fall and remained above double digits. This means that year-on-year data could hit 11.0%. Month-over-month figures also rose, this time by 1.1% instead of the projected 0.1%.

The long-awaited Federal Reserve meeting starts this afternoon, and its outcome will most certainly affect the direction of the market. If Fed Chairman Jerome Powell hints that the tight monetary policy is over, there may be a sharp rise in both euro and pound. But if he takes a much tougher stance, there will be a sharp correction in both currencies.

EUR/USD

For long positions:

Buy euro when the quote reaches 1.0795 (green line on the chart) and take profit at the price of 1.0848.

Euro can also be bought at 1.0775, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0795 and 1.0848.

For short positions:

Sell euro when the quote reaches 1.0775 (red line on the chart) and take profit at the price of 1.0742.

Euro can also be sold at 1.0795, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0775 and 1.0742.

GBP/USD

For long positions:

Buy pound when the quote reaches 1.2285 (green line on the chart) and take profit at the price of 1.2314 (thicker green line on the chart).

Pound can also be bought at 1.2269, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2285 and 1.2314.

For short positions:

Sell pound when the quote reaches 1.2269 (red line on the chart) and take profit at the price of 1.2249.

Pound can also be sold at 1.2285, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2269 and 1.2249.