The first of two key events of the week, Fed’s two-day policy meeting, starts today. Fed is widely expected to stay pat on policy this time, but investors are looking for any possible signals for tightening towards the end of the year.
The dollar slipped across the board, marking the biggest losses against Japanese yen during the Asian and early European session, on slide of over 1%. Fresh bearish acceleration that commenced from Asian high at 105.87 dipped near 104.00 support.
Yen’s strong gains came despite expectations that the Bank of Japan will ease policy on its meeting at the end of the week and investors getting skeptical about the impact of further stimulus.
According to the sources, Japanese government is preparing a spending package worth $189 billion, however, actual public spending will be far less than the numbers suggest.

Sterling hit fresh 2-week low in early Tuesday’s trading, on renewed fears of recession after last week’s purchasing managers’ data signaled contraction of British economy. This brings BoE one step closer to the rate cut, however, policymakers said that firmer evidence is needed for the central bank to take such step.
Cable trades near session low at 1.3055 in early Europe, with near-term focus shifting towards psychological 1.3000 support.

The Euro returned above 1.1000 barrier on the second day of recovery from fresh one-month low at 1.0950, awaiting results of Fed’s meeting and supported by weaker dollar. However, the single currency maintains overall bearish tone, with plethora of strong barriers lying ahead.
Oil price remains under strong pressure, with past three-day bearish acceleration, taking out some important supports and generating fresh bearish signals. Concerns about ongoing oversupply keep oil price pressure, with important $43.00 support being dented. Bearish technicals support further fall, which would extend towards next technical support at $41.87 and psychological $40.00 support expected to come in near-term focus, with weaker dollar showing no significant impact on oil prices so far.

dollar remains supported and holds near recent highs at the beginning of the week, with focus shifting towards Fed. Positive numbers of US economic data released in recent weeks have revived speculation that the US central bank may raise interest rates by the end of the year.
The greenback edged higher against most of majors in early Monday’s trading, supported by renewed risk-on sentiment on solid number of US data and fading fallout from Brexit.

Highlights of the day
Economic calendar is very light for today, with no releases in European session and highlights on US economic indicators.
US New Home Sales are expected rise by 1.6% in June on 560K forecast, following May’s fall by 6.0% at 551K.
US Consumer confidence is seen lower in July, according to forecast of 95.9 vs 98.0 in June.

Both releases are due at 14:00 GMT.

Important levels
USDJPY
Fresh bearish acceleration that took important supports at 105.40 and 104.70 and dipped close to 104.00 support, confirms an end of near-term consolidation phase on fresh bear-leg. Falling daily cloud that was frustrating bulls, eventually proved to be very strong barrier that capped bull-leg from 99.97 trough.
Strong bearish signals were generated for further downside. Break below round-figure 104.00 support would open 103.72, ahead of 103.22 (daily Kijun-sen line and extension towards pivotal 102.84 support (Fibo 61.8% of 99.97/107.47 upleg, not ruled out.
Psychological 105.00 level marks a minor resistance, ahead of more significant former low at 105.40 and daily Tenkan-sen pivot at 105.73.
EURUSD
The pair holds steady near-term tone, following yesterday’s bullish close and today’s extension of recovery leg from 1.0950 low, which probed above psychological 1.1000 barrier. Overall structure remains bearish and keeps the downside focused, with fresh bear-leg expected to commence on completion of current correction.
Series of good resistances lay ahead, starting with 1.1033 (10SMA), then 1.1062 (20SMA) and 1.1077 (200SMA), which is expected to limit extended rallies.

GBPUSD
Fresh bearish acceleration that cracked important supports at 1.3077/63, signals an end of near-term consolidation phase that was capped at 1.3162.
Final break lower is needed to confirm bearish reversal pattern and open way towards initial target at 1.3000 and 1.2956, in extension.
Initial resistance lies at 1.3100, followed by 1.3151 and 1.3177., Market Analysis