A drop below that will see sellers seize near-term control and will put pressure on minor support around 1.0140-55 next. If that gives way, the technical picture will turn more bearish for the euro with a look towards parity again perhaps. That said, it will all come down to the Fed tomorrow for any real conviction for such a move.
Meanwhile, GBP/USD is also trading down to just below 1.2000 and testing its 100-hour moving average at 1.1997 as outlined here.
Commodity currencies are also not spared from the dollar’s wrath with AUD/USD down 0.3% to 0.6935 on the day after the high earlier touched 0.6983 and testing the 50.0 Fib retracement level:
These are all key levels that were highlighted since the end of last week and the dollar is certainly showing that it is standing its ground. I wouldn’t chalk up the moves to any headlines on the day as this looks to be more like positioning plays ahead of the Fed tomorrow.
This article was written by Justin Low at www.forexlive.com.