In times when financial markets are dominated by politics, it only takes some rhetoric to direct currencies in the desired direction. The Trump administration prefers to see a weaker U.S. dollar and therefore American advisers or Trump himself seek to talk down the currency. And this did work out well. The dollar slipped as Trump recently said that the currency is 'too strong' and now it extended its losses against the euro after Trump's trade adviser called the euro "undervalued". This means that the political concept, at least in the short term, is proving to be successful. We are waiting to see what happens next.
The euro stabilized around 1.08 after a brief glimpse above 1.0810. In Asian trading we see prices formatting a bullish pennant in the hourly chart, predicting further bullish momentum after a renewed break above 1.08. Once the 1.0815-level is significantly breached we may see further gains towards 1.0855/70. On the downside the 1.0750-level remains in focus. If the euro falls back below 1.0740 it may tumbles towards 1.0720 and 1.07. 
The British pound rose towards 1.26 ahead of the Bank of England's 'Super Thursday'. It will now be interesting whether the pound will be able to overcome the 1.26-hurdle and rise towards 1.2770 and possibly even 1.29. On the bottom side we will wait for a break below 1.2410 which could drive the pound towards 1.2330 and 1.2260. Sterling traders may pay some attention to the U.K. Manufacturing PMI numbers, due for release at 9:30 UTC.
Today's FOMC rate decision (19:00 UTC) is normally the most prominent event risk but this time however, it could be a non-event for traders. The Federal Reserve is not expected to raise rates at this early stage of policy development but investors will watch for signals of a March rate hike. If the FOMC statement signals a higher likelihood of earlier rate hikes this year, the dollar will rally. With no new insights into the Fed's tightening plan, the market's reaction to the FOMC decision could be subdued while the risk for the dollar remains skewed to the downside.
After the Fed, the focus will quickly shift to Friday's NFP report. The ADP report, scheduled for release at 13:15 UTC could provide a foretaste of what to expect from the payrolls report. Furthermore, the ISM Manufacturing index, due at 15:00 UTC will draw the market's attention.
Here are our daily signal alerts:
EUR/USD
Long at 1.0820 SL 25 TP 20, 35
Short at 1.0760 SL 25 TP 15, 40
GBP/USD
Long at 1.2610 SL 25 TP 30, 50
Short at 1.2525 SL 25 TP 25, 45
We wish you good trades and many pips!
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