The greenback experienced a mixed session again ahead of the FOMC meeting as the weak U.S. Retail Sales figure failed to boost the currency. The sterling plunged ahead of the pre‐election Budget Report and due to the Brexit fears while the yen remained strong following BoJ policy meeting. The euro enjoyed a calm session in the absence of macro‐driver updates on the domestic front.

Daily Technical Analysis And Forecasts

Fed to hold current rates but will Yellen signal a not too far rate hike?
No rate changes are expected in today’s Fed policy meeting, as the health of the global economy continues to worry. Policymakers are expected to keep the current monetary policy unchanged and the interest rates at 0.5%. However, Yellen’s comment for the economy will be scrutinized by investors for hints of the timing the central bank will continue to tighten the monetary policy. The Fed Chairwoman will underline the improved inflation rate and labour data thus the FOMC projections will be eyed to gauge Fed’s view for the economy.

Although, it’s noteworthy that before the awaited Fed policy meeting, final February’s Inflation Rate will be out. The yearly figure is expected to slow down to 0.9% from 1.4% in January but stills by far better than a few months ago when the country was fighting with deflation.

Daily Technical Analysis And Forecasts

The U.S. Retail Sales released yesterday were in line with forecasts of the Commerce Department. They declined modesty by 0.1% in February, following a drop of 0.4% in January. The Producer Price Index slid by 0.2% while the Business Inventories rose by 0.1% in January versus expectations of a flat month. The National Association of Home Builders' (NAHB) housing market index is remained at 58 despite the market consensus to improve to 59 in March.

Euro subdued due to the absence of heavyweight numbers
The shared currency was traded higher of the majority of the G10 currencies but remained flat versus the U.S. dollar, Swiss franc, Japanese yen and Swedish krona. The only noteworthy indicator from the 19‐nation union was the Employment Change for Eurozone as a whole that surpassed market consensus of 0.2% and rose by 0.3% qoq and didn’t trigger significant volatility.

EUR/USD closed little changed again on Tuesday as traders stood on the side ahead of the upcoming FOMC meeting, with little change to the outlook. Therefore, the levels to watch are pretty much the same. The pair is trading above the 1.1060 minor support, which coincides with both, the 50‐SMA and the 200‐SMA on the 4‐hour chart. With the short term momentum indicators pointing lower, further losses would head towards 1.1030.

Pound plunged on Brexit fears as they expect Pre‐Election Budget Report
Two months before UK votes on its EU membership the GBP traders are expecting the Budget Report announcement from the Chancellor George Osborne. The market expects the Chancellor with the red box to set out £4bn in extra spending cuts and to announce investment in the UK's infrastructure. Early in the morning, before the release of the Budget Report, the Employment Data will add to the picture of the economic outlook.

Daily Technical Analysis And Forecasts

GBP/USD is looking bearish at the moment as is trading below 1.4250. It’s remarkable that for the last two days the USD added 300 pips to its value against the GBP, as the pair plunged for a second consecutive day after a failed attempt above 1.4435. The next level to watch will be the psychological level of 1.4100. Below this would allow a return to another psychological level at 1.4000.

EUR/GBP – Technical Outlook

The pound remained under some pressure against the euro heading into early European session ahead of the some significant data coming from the UK. This pair is struggling to move lower and those who are shorts may want to take partial profit at 0.7850. The medium‐term picture has improved slightly as the pair bounced off the September and last week's low. Therefore, we would see a clear double bottom formation on the weekly chart, which is a trend reversal. I am therefore bullish while price remains below 0.7930, which coincides with the weekly 200‐SMA. An hourly close above the latter level would provide the bullish trigger I am looking for. The target for this week will be the 0.8050 barrier and then the 0.8115 level.

USD/JPY – Technical Outlook
The USD/JPY pair is continuing to trade in a fairly tight range, with 114.60 – 114.85 capping any moves to the upside and 111.00 propping it up. Over the last couple of weeks, the pair hasn’t even reached these boundaries with the range appearing to have tightened further. The 200‐SMA is providing a strong resistance to the bears, near the aforementioned zone. On the downside, the first support will be seen at 113.00 and then at 112.60. A move back to 111.00 and to last week’s low at 112.20 seems unlikely today, but the medium‐term indicators remain positive and in the case that we do head back below the key level of 112.60 then we should wait for a run towards the key 111.00.

USD/CAD – Technical Outlook
The USD/CAD pair has had a range bound session during yesterday’s session ahead of the FOMC meeting due later today. Technically there is no change to this pair. On the downside, support will be seen at the session low of 1.3330 and then at 1.3300, below which would find more sellers at 1.3280. On the other hand, the first obstacle for the bulls will be at 1.3400, last week high. Above here would see a run to 1.3430 and then to 1.3500.

AUD/USD – Technical Outlook
After trading in a tight range, the AUD/USD pair is finishing the day at its lows but once again not too far removed from the weekend closing levels. A return back to 0.7363 looks possible for now. Below here would see a run toward the 50‐SMA and the 200‐SMA on the daily chart, near 0.7180, which is my target for the next few days.

Daily Technical Analysis And Forecasts

U.S. Indices Virtually unchanged ahead of FOMC meeting
The U.S. indices have been in a quiet session as well, expecting the Fed’s two‐day meeting conclusion. Not much changes in the three popular U.S. Indices. The Dow Jones closed the day in green once again with marginal gains of 0.13% while Nasdaq and S&P 500 experienced slight losses. The tech‐heavy index slid 0.45%. The S&P 500 dragged 0.18% down by the Healthy Care stocks that plunged by 1.55% on average.

Daily Technical Analysis And Forecasts

What to watch today
During the morning, the UK the Employment Report will be released. The ILO Unemployment Rate for the three months to January is expected to have remained stable at the record low of 5.1% and the Average Earnings including bonus to rise by 2.0% from 1.9% prior. In February, the market predicted that the unemployed people in UK decreased by 9.1K, less than the month before that decreased by 14.8K.

In US, before the Fed policy meeting, a slew of economic indicators will inundate the USD traders. In the housing sector, the Building Permits and the Housing Starts in January will be out. The Inflation Rate will be the closely eyed as it surprised positively in January by picking up closer to Fed’s 2% target in the last 15‐months. The inflation rate yoy currently stands at 1.4% and is expected to slow down at 0.9%. February’s Industrial Production and Capacity Utilization will be out as well.

At 18:00 GMT time, Fed will announce its interest rate decision accompanied with the FOMC Economic Projections. A half an hour later, Fed Chair Janet Yellen will give a press conference.

Daily Technical Analysis And Forecasts

Later in the second half of the trading session, the New Zealand’s GDP for the fourth quarter will be out. Overnight, Australia’s employment data for February will be released. The Jobless Rate is anticipated to remain unchanged at 6% and the number of employed people to increase by 10.0K versus a decrease of 7.9K in January.

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