EUR: I too have moved to the sidelines for now. I suspect we will trade a range until the meeting and look for support at 1.2420 and 1.2380 with resistance at 1.2500 and 1.2540.
JPY: Lack of positioning leaves USDJPY as the cleaner trade in G3 to be long dollars heading into the FOMC, with the additional benefit of avoiding the euro’s seasonality. While likely to be relatively range bound ahead of the FED, we would leave a stop around 117.50 below the first support of 117.78. First resistance will be the opening high of 119.13.
GBP: GBP feels very much stuck within the broader range with longer term downtrend likely to cap into the Fed at 1.5760, support at Fridays lows of 1.5697.
AUD: Given the domestic backdrop and deterioration in commodities it’s too early to rule out near term cuts and expect the RBAs hand will be forced – we therefore continue to see AUD weakness playing out. Levels: yesterday’s lows of 0.8214 and 0.8200, topside 0.8320/40 the resistance area.