**EUR/USD, USD/JPY, and AUD/USD Analysis: US Dollar Exhibits Mixed Performance Ahead of FOMC Decisions**
*Based on the original article by Christopher Lewis, FXEmpire*
—
As the global forex market heads into a pivotal week dominated by the U.S. Federal Reserve’s policy decision, major currency pairs such as EUR/USD, USD/JPY, and AUD/USD are showing varying levels of strength and volatility. The anticipation around the Federal Open Market Committee (FOMC) meeting is driving traders to positions of caution, resulting in mixed movements for the U.S. dollar across different currency pairs.
This article delves into the latest technical and fundamental analyses of these three prominent pairs, examines recent U.S. economic indicators, and gathers insights from additional major sources like Reuters and Bloomberg to provide a broader view of market drivers and potential outcomes.
—
**Current U.S. Economic Backdrop**
The performance of any major currency pair linked to the U.S. dollar is, of course, heavily influenced by macroeconomic factors and monetary policy expectations. Entering this week, several significant data points and developments have shaped market sentiment:
* **May Non-Farm Payrolls:** U.S. employment data surpassed expectations, with payrolls rising by 272,000, significantly higher than economists’ forecasts of around 185,000. Unemployment, however, inched higher to 4.0 percent, reaching this threshold for the first time since early 2022.
* **Inflation Trends:** The May U.S. Consumer Price Index (CPI) report, due for release just before the FOMC announcement, is a crucial trigger for the U.S. dollar’s short-term direction.
* **Federal Reserve Policy Outlook:** Markets have recalibrated expectations over recent weeks. At the start of the year, traders anticipated several rate cuts in 2024. Now, the consensus is leaning towards a longer hold or a maximum of one cut toward year-end, with persistent inflation pressures and robust labor data tempering the dovish outlook.
* **Global Economic Considerations:** Other central banks, such as the European Central Bank (ECB) and the Bank of Japan (BoJ), are navigating their own monetary policy shifts. The ECB signaled a dovish cut recently, while markets closely watch the BoJ for possible steps toward policy normalization.
—
**EUR/USD: Facing Range Resistance After Hawkish Payrolls**
The EUR/USD pair trades just below the 1.0800 mark in the European session, with momentum muted by mixed U.S. data and anticipation of the Fed’s announcement.
**Technical View:**
* The pair had recently climbed above the key psychological level of 1.0800, buoyed by dovish ECB signals and some softness in the dollar. However, the strong payrolls report pushed EUR/USD back towards support at 1.0750.
* Short-term charts display a consolidation pattern. The 50-day moving average is flat, while the RSI
Read more on AUD/USD trading.