FX markets are still trapped to some extent by the impending Fed meeting, with CPI figures and ZEW data on the calendar for the day also weighing on minds. 

Source: Bloomberg

GBP/USD looks set for more losses
Having failed to push on yesterday, it looks like a close down towards $1.51 today would indicate more losses on the way in GBP/USD. Over the past three sessions, $1.51 itself has been major support, but a daily close below here would target $1.5059 and then $1.5101 – key support from 8/9 December.

Any bounce needs a daily close above $1.52 to confirm bullish momentum, with a target around $1.5238 (the 50-day simple moving average [SMA]) and then on towards $1.5304.

EUR/USD may be ready to swing
The push to the 200-day SMA ($1.1036) indicates we still have bullish momentum in EUR/USD, but with indicators such as relative strength index and stochastics now at elevated levels, caution is advisable for latecomers to this rally.

Further targets lie around $1.11 and then $1.1148, but the risk is now more to the downside, with a move below $1.10 signaling further weakness and pointing towards $1.0941 and then $1.0838. 

AUD/USD in the hands of the bulls
Having bounced yesterday, it now remains for Aussie bulls to push on through $0.73 to confirm upward strength is still in pace. This would lead to a test of targets in the direction of $0.7337 and then on towards $0.7403.

A failure to hold these gains would push the pair back towards $0.7206 (the 50-day SMA) and then down towards $0.7186. 

USD/JPY remains bullish
Dips towards ¥120.50 continue to be bought, so for the moment it looks like the early December pullback has run its course.

If the price can sustain a move through ¥121 then we may see a push towards ¥121.60 and the 200-day SMA. Only a close below ¥120.50 confirms that the sellers are back in charge.

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