On Wednesday, the FOMC is likely to drop its current forward guidance that it will “be patient in beginning to normalize the stance of monetary policy” from the March statement. – we maintain our bullish view on the USD vs EUR, GBP, JPY, CAD, AUD
{EU} EURUSD Lower => The pull backs from the lows continue to overshoot with yesterday’s 170pip reversal reminding the market that even the most popular core views can feel uncomfortable at times. We maintain our conviction of EURUSD lower. Ahead of the FOMC we expect to find resistance towards 1.0620/30 and then 1.0685/1.07. Support comes in towards 1.0550/65 initially after which 1.0455/65 double bottom from Friday/Monday should catch the pair.
{GB} GBPUSD Lower => Profit taking pre Fed sees a reversal in the USD which helps Cable close back above the 2014 lows. We continue to like GBP lower and believe rallies should be fairly limited back towards 1.4900 at this stage. Support comes in at 1.4780 and 1.4699.
{JN} USDJPY Higher => Yesterday, USD/JPY have traded in a tight ~30 pip ranges. We still like the pair higher with levels to watch: the key resistance level is 122.00-05, while on the downside, the main support levels are 120.90 and 120.60-75 below.
{CA} USDCAD Higher => We like the pair higher again. Key technical levels: support at 1.2735 and then 1.2680, with the main resistance level coming in at 1.2819, then 1.2824.
{AU} AUDUSD Lower => The RBA minutes reaffirmed an easing bias and our economists remain confident that rates will shift lower again in the near term. AUD/USD have traded in a tight ~30 pip ranges, with the market finding little to get excited about. We foresee more AUD weakness, with key levels: topside resistance at 0.7680 and then 0.7720/40, while on the downside, the main support is 0.7600.