Markets had a relatively quiet start into the new trading week. The Euro consolidated in a 1.1200-10 range, while GBP/USD traded between 1.2710 and 1.2770. The Pound is likely to suffer from the political uncertainty in the near-term, and selling interest on larger rallies will be high. Strong resistance is seen at 1.2820 and ahead of 1.29.
USD/JPY is slightly lower amid a decline in Asian stock markets. The pair fell from 110.45 to 110.15 in Asia. The short-term outlook is mixed. Should USD/JPY fail to break above 111 resistance soon, a retest of 109 seems likely.
AUD/USD consolidated in a 10 pips range overnight. Important support lies at 0.75. A break below would suggest that momentum is still too weak, and that a return to 0.7380 support is likely.
Overall, volatility in the FX market is likely to remain low ahead of the Fed meeting on Wednesday. The central bank is expected to increase interest rates, but the focus will be on the FOMC projections and statement. A cautious Fed could bring the Dollar under additional pressure.
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