The U.S. Federal Reserve’s monetary policy meeting is coming up later today, and the markets are likely to remain subdued into the event. The short-term interest rates are expected to rise by 25 basis points, but the markets will be focusing on what forward guidance. Following the rate decision, there will be a press conference by Janet Yellen along with fresh economic forecasts as well.
In the UK, economic data will include the monthly jobs report where wages will be closely scrutinized, especially after inflation surged 2.9%. This will possibly put the BoE in a tight spot if wages fail to rise.
EUR/USD intraday analysis
EUR/USD 4 Hour Chart
EUR/USD (1.1214):EUR/USD continues to consolidate within a rising wedge pattern, and the price action suggests a modest upside in the making. Price is likely to test 1.1260 – 1.1245 where resistance could be forming. This near-term upside is also validated by the doji close that has formed. Following a retest, a reversal from this resistance level could keep the EUR/USD biased to the downside. The support at 1.1100 followed by 1.1000 is most likely to be tested in the near term.
GBP/USD intra-day analysis
GBP/USD 4 Hour Chart
GBP/USD (1.2747):The British pound posted a recovery yesterday as the inflation data showed that the UK’s consumer price index rose 2.9%, more than expected. With the jobs and BoE meeting scheduled this week, the modest recovery is likely to see GBP/USD test the resistance level that could be developed at 1.2800. The downside remains intact with GBP/USD likely to resume the declines towards 1.2600 to complete the downside target from the head and shoulders pattern. On the 4-hour chart, resistance zone is seen at 1.2800 – 1.2767.
USD/JPY intraday analysis
USD/JPY 4Hour Chart
USD/JPY (110.04):The USD/JPY slipped back below 110 after testing the resistance level briefly near 110.79. This higher low that is formed is likely to see price action push modestly higher. A break out above 110.79 is needed for USD/JPY to aim for 112.00 – 111.70 resistance level. Alternately, if USD/JPY slips below 110.00, then expect the near term to test the support level at 109.50 – 109.25 which was previously tested. The downside bias will increase only on a decline below this support level.