Fed Decision Looms: Big FX Moves On Deck for EUR, GBP, USD/JPY

Major currency pairs traded cautiously during Wednesday’s Asian session, with the U.S. dollar weakening modestly as traders square positions ahead of the critical FOMC policy update. A Fed rate hold is widely priced in, leaving markets waiting for fresh guidance to trigger the next leg of directional moves.

EUR/USD: Temporary Relief, Bearish Structure Intact

EUR/USD clung to mild two-day gains near 1.1390, benefiting from pre-Fed USD softness. Still, the overall technical structure remains bearish, with upside momentum heavily capped.

Last week’s rejected breakout at the 1.1480–1.1485 200-period SMA continues to act as strong overhead resistance. Sub-50 RSI and negative MACD readings confirm weak bullish traction.

Downside pressure remains the default trend. A break below 1.1400 will likely trigger a retest of the June low at 1.1325, while a sustained breakout above 1.1480 is needed to flip the bearish outlook.

GBP/USD: Mild Upside Capped By Key Long-Term SMA

Cable edged higher toward 1.3300, drawing support from a weaker U.S. dollar after flat overnight trade. Though the pair has broken its short-term downtrend, the 200-day SMA at 1.3397 poses a stiff technical barrier.

Daily momentum has turned neutral-to-bullish, with RSI holding above 50 and MACD in positive territory, supporting limited near-term upside.

A clean break above 1.3397 will open a retest of the 1.3455 recent high. On the downside, immediate support lies at the 1.3330 range floor, followed by secondary support at 1.3290–1.3270.

USD/JPY: Tight Consolidation Pre-Fed & Pre-BoJ

USD/JPY stalled below the key 164.00 multi-year high, entering tight range consolidation. Traders are avoiding large bets ahead of Wednesday’s FOMC decision and Friday’s pivotal BoJ policy release.

Renewed U.S.-Iran geopolitical tensions offered mild safe-haven support for the dollar, yet failed to spark breakout momentum, as markets wait for central bank cues to dictate the next trend.

FX volatility remains suppressed pre-event, with all three major pairs holding tight ranges. This week’s central bank decisions are set to break the stalemate and drive the next wave of market volatility.