EUR/USD: levels to watch ahead of FOMC

EUR/USD Current price: 1.1059

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The EUR/USD pair retreats from  daily high of 1.1076 ahead of the US opening,  having got a short term boost from some ECB's officers, commenting on the future of the region economic policies. The macroeconomic calendar has been pretty quiet so far in the day, with the only piece of data released in Europe being the German import price index, which fell by 4.0%  yearly basis, reflecting the slowdown in the EU largest economy. Investors however, are holding their breath ahead of the US Federal Reserve decision over its economic  policy, to be announced later today. The pair has been confined to a tight range ever since the week started, for the most consolidating around the 1.1050 figure.

Technically, the 1 hour chart shows that the price tested a bearish 100 SMA before retreating, whilst the technical indicators have lost their upward strength above their mid-lines. In the 4 hours chart, the price is above a flat 20 SMA, whilst the Momentum indicator is turning south around the 100 level, and the RSI hovers around 41. Overall, the bearish tone set last Thursday by the ECB remains firm in place, although whether it can extend or not, depends on whatever the FOMC announces today. Markets are waiting for a mild dovish tone, which means that some encouraging comments over a rate hike before the year end, can well sent the pair lower towards fresh lows through the 1.1000 level.

Support levels: 1.1000 1.0960 1.0920

Resistance levels: 1.1080 1.1120 1.1160

GBP/USD Current price: 1.5283

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The GBP/USD pair extended its weekly decline by a handful of pips, down to 1.5275 so far this Wednesday, and trading a few pips above the level. There has been no relevant data released in the UK, but the Pound has been weighed by the slide in commodities' prices. The short term picture is bearish as in the 1 hour chart, the price has failed to advance above a still bearish 20 SMA, whilst the technical indicators have extended their declines into negative territory. In the 4 hours chart, the 20 SMA heads sharply lower above the current level, whilst the RSI indicator approaches oversold levels, all of which supports a continued decline towards the 1.5200 region. 

Support levels: 1.5280 1.5250 1.5210

Resistance levels: 1.5320 1.5355 1.5390

USD/JPY Current price: 120.32

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The USD/JPY pair trades flat around 120.35 ever since the day started, as investors are waiting not only for the US Central Bank decision, but also for the upcoming BOJ meeting outcome early Friday. Against the usual, the pair can see limited reactions post-FED, and even return to the current level after the dust settles, particularly if the US Central Bank offers no news. Technically, the pair lacks directional strength, with the 1 hour chart showing the price trapped between its 100 and 200 SMAs, and the technical indicators hovering around their mid-lines. In the 4 hours chart, the RSI indicator heads nowhere around 46, while the  Momentum indicator continues correcting higher, but below its mid-line. Should the FED be a big disappointment the pair can break through the 120.00 support and extend its decline down to the 119.30 region, where some buying interest is expected to surge. Above 120.70 on the other hand, the rally can extend up to 121.30/50, where the 200 DMA should continue to cap the upside. 

Support levels: 120.00 119.65 119.30

Resistance levels:  120.65 121.00 121.40

AUD/USD Current price: 0.7129

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The Aussie plunged after the release of the third quarter local inflation readings, much worse-than-expected. Trimmed CPI for the mentioned period came out at 0.3% against previous 0.6% and expectations of 0.5%, leaving the yearly figure at 2.1%, against the expected 2.4%. The AUD/USD pair fell down to 0.7110, and has barely bounced from the level afterwards, consolidating some 20 pips above the mentioned low. The 1 hour chart shows that the technical indicators have managed to correct the extreme oversold readings reached after the release, but that they remain well below their mid-lines. In the same chart, the 20 SMA heads sharply lower, providing an immediate resistance around 0.7150. In the 4 hours chart, the bearish potential is still strong, given that the 20 SMA has turned strongly lower well above the current level, whilst the technical indicators remain near oversold levels. 

Support levels: 0.7110 0.7070 0.7035

Resistance levels: 0.7150 0.7195 0.7240