**Analysis of Key Forex Pairs Ahead of the Fed Decision: EUR/USD, USD/JPY, and GBP/USD**
*Original article by Greg Michalowski via InvestingLive.com*
The financial markets are on edge as traders prepare for the outcome of the latest U.S. Federal Reserve policy decision. With inflation remaining a pressing concern, the decisions and commentary coming out of the Fed can influence the global foreign exchange (forex) markets significantly. On today’s agenda, three major currency pairs — EUR/USD, USD/JPY, and GBP/USD — are at critical technical junctures. Technical analysis becomes even more essential in an environment like this, where policymakers’ choices could trigger substantial market volatility.
Here is a comprehensive technical breakdown of these three key forex pairs ahead of the highly anticipated Fed decision:
## EUR/USD: Key Technical Levels Remain in Focus
The EUR/USD pair has been consolidating but continues to display a mildly bullish tone in the short term. Traders are watching for a decisive break of some key technical levels as the pair remains reactive to market sentiment and data out of both the U.S. and the European Union.
### Technical Highlights:
– The pair recently climbed above the 100-hour Simple Moving Average (SMA) which stands as a short-term support point. This level sits around 1.0786.
– Resistance is currently identified near the 200-hour SMA, which is aligning near the 1.0845 area.
– A key high that traders should note is 1.0844. The market has found some supply here before, and a break above could signal increased bullish momentum.
– If buyers manage to push the EUR/USD above the 1.0844 resistance, it could open the door to a further rise toward 1.0887.
– On the downside, a move below the 100-hour SMA at 1.0786 would be seen as a short-term loss in bullish momentum. This may push the price toward 1.0760, where the 200-day SMA resides, acting as a major support level.
– Further below, 1.0723 stands as additional support. This was a recent swing area where buyers stepped in before.
### Summary Outlook:
While market expectations are leaning toward a “hawkish hold” from the Fed, the EUR/USD remains in a range, capped below 1.0845 resistance. A breakout on either side, especially as a response to the Fed’s decision, could trigger a larger directional move. Until then, the moving averages and previously established highs and lows provide a framework for intra-day trading strategies.
## USD/JPY: Ranging Behavior Continues Ahead of the Fed
The USD/JPY pair has shown some classic range-bound trading behavior as investors balance safe-haven demand for the Japanese yen against rising U.S. yields. Market participants are now keying in on whether the Fed will signal further tightening or if they maintain a more neutral tone in their forward guidance.
### Technical Highlights:
– Over the past several days, USD/JPY has traded within a defined range between 144.94 and 147.34.
– The high of 147.34 marks a critical resistance point. The price attempted to break above that level earlier this month but failed to sustain momentum.
– The support level of 144.94 has held firmly, with buyers re-entering the market at that point.
– The 200-hour SMA is currently trending upward and lends additional support near the 145.60 area. This might serve as a “rubber band” level where the market could bounce if tested.
– A break below the 144.94 support, especially on a dovish surprise from the Fed or a rally in the yen, may push USD/JPY lower toward 144.00.
– On the flip side, if yields continue to climb or risk sentiment turns, a break and sustained move above 147.34 could trigger a retest of the 148
Read more on EUR/USD trading.