FX levels to watch – GBP/USD, EUR/USD, USD/JPY, AUD/USD

Federal Reserve day has arrived, with key implications for currency pairs around the globe. 

Pound and dollar
Source: Bloomberg

GBP/USD eyes $1.2782

We enter the second day of key UK data, with unemployment readings likely to provide key volatility. The price failed to hold above $1.27 yesterday, despite a rally heading into the CPI numbers.

A break higher for the pair requires a move through $1.2708 and then $1.2782. Only a close below last week’s low at $1.2559 would suggest we have seen the sterling rally come to an end.

EUR/USD bears await Fed meeting

Gains for EUR/USD since Monday have been capped around $1.0664, with the price falling back from this level already. If it does push higher, then the next areas to watch will be $1.0714 and then $1.0825.

Bears will not be able to celebrate unless they manage to get the price below $1.0525, and then they need a daily close below this level. Much will depend on what the Federal Reserve says tonight.

USD/JPY dips find buyers

Having poked above ¥116 at the beginning of the week, the pair has traded in a consolidation mode, with dips to or below ¥115 bringing out buyers.

We would need to see sustained price action below ¥113.50 to indicate that dollar weakness is driving a move lower here. Below ¥113.50 the targets are ¥111.44 and then ¥107.50.

The ¥121.55 mark is the next big level to watch on the upside. 

AUD/USD could find support at $0.7423

The pair is making another attempt to break the $0.75 area, which has acted as a ceiling since it first reached it at the end of November. 

A rally from here would then target $0.7519, $0.7545 and then $0.7567. A drop could test $0.7470, with a bigger move heading to support at $0.7423. 

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