The markets find themselves caught between the Bank of Japan and the Federal Reserve, with the outlook now dependent on what Janet Yellen says this evening.
GBP/USD eyes 50-day SMAAnother dive yesterday keeps this downtrend ticking along for the pair, although clearly there will be some hesitancy around the Fed meeting today. Short-term support is possible around yesterday’s lows of $1.2945, but a break below here opens the way to $1.2880 and then $1.2790.
Any bounce needs to clear the 50-day simple moving average (SMA) at $1.3159 to indicate that a turnaround is in progress.
EUR/USD could see $1.1080The pair has recovered from its lows but the downtrend remains in place. The $1.1123 mark continues to hold as support, so a break of this is the key level to watch, as this will take us down to the rising uptrend line for the year, potentially around $1.1080.
Rallies have been firmly sold over the past few days, so this may be replicated today. Any bounce has to clear $1.12, which provided a stumbling block earlier in the week.
USD/JPY could see ¥100The excitement in USD/JPY has subsided for now, after a brief spike higher. With the Fed likely to duck a move on rates, we may see dollar weakness continue, even if ‘no change’ is what everyone is expecting.
The ¥101 - ¥101.50 zone has prevented further losses over the past few weeks, but with the BoJ out of the way now might be the time when the pair gets some downward traction.
A move through ¥101 takes us back to ¥100 and potentially onwards.
USD/CAD could look to 13 September lowThe pair has run up against the 200-day SMA (C$1.3254) and may be on the cusp of rolling over. Three times over the past week, the pair has tried to push on through C$1.3250 and has been beaten back, so now we look to see if the C$1.3150 area, such vital support over the same timeframe, is about to give way.
If it does, then we look to the 13 September low at C$1.3029.
