The main theme of Wednesday was risk aversion and concerns about global growth. Still EUR/USD bulls are trying to stick to the $1.2670 area as the market awaits the release of the FOMC meeting minutes (18:00 GMT) later today. Main resistance is located at $1.2700. Given the better performance of euro in the past two days, there’s still a chance of $1.2790/1.2800 if the Fed is dovish. Support is at $1.2630, $1.2600 and $1.2570. On Thursday watch the ECB President Mario Draghi speak at 15:00 GMT. We expect dovish comments from Draghi as the recent data from the euro area was grim.
GBP/USD consolidates below the $1.6120 resistance on Tuesday. The cable bounced from the $1.5950 support on Friday, but the upside remains contained by the trend line resistance, descending from $1.6520. On Tuesday we’ve seen a long-legged candle – market remains uncertain about pushing higher. Fix above $1.6120 could open the way to $1.6230 (July-October resistance). However, we still remain bearish in the medium term. The Bank of England will likely remain on hold on Thursday’s meeting – the meeting minutes later in the month are going to be a more important release.
USD/JPY consolidates around the 108.00 mark. According to our forecast, a daily fix below this level will trigger a more rapid bearish correction with a target of 106.00/105.80. Watch the core machinery orders data tomorrow - growth is expected to have slowed down. Next resistance lies at 108.50 and 109.00 yen.
AUD/USD is trading sideways between resistance at $0.8830 and support at $0.8750. Aussie has to overcome $0.8830 to rise to $0.8885 and $0.8930. Note that Aussie will be vulnerable for decline on Australian labor market data due tomorrow (00:30 GMT), and it makes sense to sell after the FOMC. Watch for a break of support at $0.8750 on the downside for a decline to $0.8660 with next target at $0.8605.