The US dollar has rallied a bit in the early hours of Wednesday, as we are getting ready for the interest rate announcement from the Fed and the all-important press conference.
EUR/USD Technical Analysis
The euro has fallen rather significantly during the early hours on Wednesday as we continue to hover around the 1.09 level. Keep in mind that the FOMC meeting is later today, so position squaring is likely occurring.
Here's what to watch for:
- Break Below 1.08: If the euro breaks below the 1.08 level after the press conference, it could fall much further.
- Break Above 1.0950: If the euro breaks above the 1.0950 level, again after the press conference, it's likely to target the 1.12 level.
USD/JPY Technical Analysis
The US dollar has risen significantly against the Japanese yen but has not broken above the 150 yen level yet. The Bank of Japan cited potential issues that might keep its interest rate hiking cycle on hold, including tariffs from the United States. With the FOMC meeting later today, it's a crucial time for this pair.
Key levels to watch:
- 151 Yen Level: A break above this level could lead to a much higher market.
- 148 Yen Level: A drop below this level could signal further downside.
AUD/USD Technical Analysis
The Australian dollar has fallen a bit during the early hours on Wednesday as we continue to trade in a range, defined by the 0.62 level on the bottom and the 0.64 level on the top. While the range seems to be holding, Jerome Powell's press conference could change that.
Scenarios to consider:
- Dovish Tone: If Powell sounds extraordinarily dovish, the market could rally due to cheaper US dollars and higher commodity prices, benefiting the Australian dollar.
- Hawkish Tone: If Powell is extraordinarily hawkish, it could put downward pressure on this pair.
For a look at all of today’s economic events, check out our economic calendar.