Cable followed its European cousin lower this morning after inching above 1.5600 during yesterday’s North American trade. The long trade from Monday remains open with a stop below the week’s low at 1.5512. The near-term technical picture is muddled in the unit, though rates are finding support at the central monthly pivot point at 1.5560 thus far this morning. For the rest of the day, the price action in the pair will depend heavily on how the market interprets this afternoon’s FOMC statement and related press conference (for more on what to expect, see our FOMC Preview report).

USD/JPY remains the standout performer in the currency market, with yesterday’s strong rally continuing into this morning’s trade. The pair surged all the way up to the key 78.20 resistance level, which is effectively the 3-month high in the pair. At this point, the near-term picture is cloudy, though the recent pickup in volatility is an encouraging sign. If rates manage to break conclusively above 78.20 resistance, the bias will turn bullish for a potential test of 79.00 by the end of the week. Stay tuned to FX360 and our daily Live Market Analysis webinars for any updates or trade opportunities.

Continuing its recent trend of trading inversely to the EUR/USD, the USD/CHF rallied this morning. This morning’s bounce has left rates testing a key resistance level – the monthly pivot at .9332. If rates are unable to break above this area, more consolidation around the .9300 handle will be favored in the near term, though if the pair clears this resistance level, the bias will turn bullish for a test of previous-support-turned-resistance at .9400.

The USD/CAD continued to bounce over the past 24 hours, leaving rates near minor resistance at 1.0150. The pair remains within the longer-term descending triangle pattern highlighted in our weekly technical preview report, though a break below 1.0070 support would likely foreshadow a quick move down to parity (1.00) or .9900 in short order. To the topside, bounces are likely to be contained below descending trend line resistance near 1.0200.

The Aussie initially bounced during today’s Asian session on relatively ambiguous CPI data before selling off on risk aversion during this morning’s early European session. The most recent three 4hr candles have formed a clear Evening Star formation; this relatively rare candlestick formation indicates a potential reversal from bullish to bearish momentum and suggests room for a more substantial drop. On this chart, a break below yesterday’s low near 1.0430 would turn the bias strongly bearish for a potential test of previous support at 1.0360.

The Kiwi also pulled back this morning, dropping to the limit buy order outlined in Monday’s feature. The trade idea is now open with a stop at .7990 (below the round .8000 handle) and a target up near previous resistance at .8225. In the near term, the momentum is clearly bearish and may lead to a more significant pullback over the next few hours. However, longer-term support near .8000 and the daily bullish trend line (not shown) is expected to bring a resumption of the uptrend later today. Stay tuned to FX360 for any trade updates.