The U.S. dollar appreciated against the euro and British pound after Friday's U.S. Consumer Price Index data showed a bigger than expected 0.3 percent rise in core CPI, leading to the assumption that the Federal Reserve could grow more hawkish in its post-meeting statement this Wednesday.
The Fed's Federal Open Market Committee meets on Tuesday and Wednesday, and while chances of a rate hike this week fell to just 15 percent down from 30 percent earlier this month, the focus will be on the Fed's wording in the FOMC statement. While investor's expectations shifted towards a rate increase in December, market participants will stay on the lookout for any more evidence of hawkish sentiment during Janet Yellen's press conference.
Apart from the FOMC meeting on Wednesday the economic calendar this week is very light in terms of market moving data. On this basis, trading could be quiet in the early part of the week as risk-aversion may dominate the market ahead of the Fed meeting.
Triggered by a strengthening dollar, the currency pair finally broke out of its tight trading range and fell towards 1.1150. Ahead of the Fed the price action could be oriented to support and resistance zones. While we see a lower support area between 1.1140 and 1.1120 the euro could be vulnerable to slight pullbacks, retesting the 1.12-level. With prices below 1.1120 a next lower target could be at 1.1080.
The British pound headed towards the lower bound of its recent trading range. While the odds are currently in favour of further losses, we expect the 1.2950/20-level to lend a short-term support to the cable. However, a current resistance is seen around 1.3170. 
We wish you a good start to the new week and many profitable trades in the days ahead!
Here are our daily signal alerts:
EUR/USD
Long at 1.1190 SL 25 TP 20-30
Short at 1.1140 SL 25 TP 20, 40
GBP/USD
Long at 1.3065 SL 25 TP 20, 45
Short at 1.3020 SL 25 TP 20, 40
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