Following two days of quiet, the markets will be gearing up for a lot of economic releases today. First the UK jobs report is due, with hawkish expectations of an increase in the average wages. GBP/USD has weakened strongly but remains supported above the 1.40 handle. Meanwhile, EUR/USD and USD/JPY are into a holding pattern ahead of the Fed’s statement and press conference today.
EUR/USD Daily Analysis
EUR/USD (1.10): EUR/USD formed a doji pattern yesterday, but the downside remains open towards 1.10 - 1.09 support. Price remains consolidating just below the resistance at 1.113 - 1.1105, which if holds could see the upside limited. Below 1.09 support, EUR/USD could decline to as low at 1.0825 - 1.0835, which was barely tested during last week's ECB meeting. With the FOMC meeting due later today and US economic data, EUR/USD could see some significant volatility into the meeting. In the event that EUR/USD breaks above 1113 – 1.1105, a test to the next resistance near 1.12 – 1.13 could be possible.
USD/JPY Daily Analysis
USD/JPY (113.4): USD/JPY closed on a bearish note yesterday, and could see a risk to the downside for 112.0 support. On the 4-hour chart price action remains flat with no clear bias being established just as yet. In this aspect, there is a strong indication that USD/JPY could breakout from its range during the FOMC meeting. Watch for 112.0 - 112.5 support level, which if breaks could see a test to 111.0, while to the upside above 114.7 - 114.35 resistance, 117 - 117.25 will be the next resistance level of interest.
GBP/USD Daily Analysis
GBP/USD (1.41): GBP/USD has declined strongly following a brief test of resistance near 1.435 – 1.43 and is now trading below 1.420. Any upside gains are likely to be limited below 1.43 resistance, while a decline to 14025 - 1.40 is very likely. UK jobs report will be due for release today, which could be the main fundamental risk aside from the US data due later in the evening.
Gold Daily Analysis
XAU/USD (1233): Gold has broken out from the rising wedge pattern on the daily chart and is now trading below the $1250 support. A rally back to this level to establish resistance could pave the way for a dip to $1200, with prices currently trading near the 1230 - 1225 support level.