Today is going to be an historic day, as the Federal Reserve is expected to normalize monetary policy and end seven years of near-zero interest rates. The following guidance is expected to be dovish, implementing less than three increases of 0.25 percentage points in 2016. Market participants will turn their focus to the FOMC Press Conference, led by Fed Chair Janet Yellen. It might be a communicative challenge for Ms. Yellen, as the Fed neither want to cause turbulence with any hawkish comments nor want to lose their credibility. Anything can happen today, so traders should prepare for big moves in either side. If Yellen signals a clear guidance regarding the Fed's tightening cycle, the USD could rally. However, the risk is to the downside for the greenback, as any cautious comments could trigger a sharp selloff.
The U.S. dollar advanced against its major peers going into the Fed's decision. The British pound dropped like a stone on the Bank of England's dovish monetary policy outlook. BoE Governor Carney said in an interview that economic conditions for a U.K. rate hike are not yet in place. The U.K. central bank has signaled it is in no rush to follow the Fed, which is forecast to begin policy tightening.
The U.K. Employment Report is scheduled for release today at 9:30 GMT and the focus will be on Average Weekly Earnings. If wage growth comes in softer than expected, sterling could be vulnerable to further losses.
Eurozone Consumer Prices are due for release at 10:00 GMT, but as long as data meets expectations, the impact on the euro could be limited.
The Federal Reserve decides on monetary policy at 19:00 GMT, followed by the press conference at 19:30 GMT.
Let's have a look at the technical side:
Looking at the daily chart, we see the pair still trading within a downward channel. Depending upon the Fed speak, we see some chances that dollar bulls may drive the EUR/USD to lower levels. Lower targets could be at 1.0840 and 1.08. In case the pair falls significantly below 1.0780, the focus turns to 1.0690 and 1.0635. The support line is at 1.0450 but an unambiguously hawkish statement would be needed in order to send the pair towards such levels.
A bullish scenario could gain attraction with prices above 1.11. A sustained break above this key resistance could lead the EUR/USD towards 1.13. 
We see an upward channel within a primary downward channel. While the primary trend is downwards, the pound sterling formatted a recent upward channel, which is still intact this morning. If GBP breaks below 1.5020 and further 1.50, we expect the pair to decline towards lower targets at 1.49 and 1.4850. Based on the recent upward channel, it is also possible that sterling rebounds, heading for 1.5130 and 1.5290.
Everything will depend on the Fed. So, we will wait and see. We wish all traders profitable trades for today.
Here are our daily signal alerts:
EUR/USD
Long at 1.0975 SL 25 TP 35, 100
Short at 1.0925 SL 25 TP 40, 100
GBP/USD
Long at 1.5116 SL 25 TP 40, 100
Short at 1.5020 SL 25 TP 40, 100
We wish you good trades and many pips!
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