Dollar weakens as FOMC begins its two-day meeting
EUR/USD and GBP/USD are recovering this morning while USD/JPY drops back, as nervousness builds in markets as they look towards tomorrow’s Fed decision.
EUR/USD attempts to hold the 50-day SMA
EUR/USD retreated yesterday, returning to the 50-day simply moving average (SMA) (currently $0.9888) after breaking above it last week.
The price is now rebounding from oversold intraday conditions, moving higher off the 50-day moving average (MA) in a bid to recover lost ground. A drop back below the 50-day MA would bolster the bearish view, and bring trendline support from the September low into play. Further losses below this would likely signal an additional push back to the lows of September.
Continued gains above $0.998 would likely suggest that another attempt to push higher is underway.
GBP/USD recovers above $1.15
Dollar strength bore down on GBP/USD yesterday, but it has edged up in early trading.
This pair still finds itself awaiting the Federal Reserve (Fed) decision tomorrow, but hopes of a softer Fed outlook have seen a small recovery. Further declines towards the 50-day SMA (currently $1.137) would also bring rising trendline support from the September low into view.
A move back above last week’s highs would continue to bolster the neutral view and suggest that the pair may push towards the 100-day SMA.
USD/JPY drops back
The USD/JPY apparent recovery has stalled, as nervousness around the next Fed decision prompts some dollar weakness.
Further declines target the 50-day SMA (currently ¥144.32), deepening the retracement but leaving the uptrend firmly intact.
Bulls will want to see today’s weakness reversed and a fresh move towards ¥150.00 develop.
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