Investors are feeling nervous awaiting the Fed later in the day. But at the same time, don’t discount the impact from the US data later. There is the ADP employment change, ISM manufacturing PMI, and JOLTS job openings before the FOMC meeting comes in. Those will also play a role in driving market sentiment in the first half of US trading at least.

But if we are to see a more hawkish Fed take later in the day, risk trades could really be in for a world of hurt. For the S&P 500, a test of the 100-day moving average (red line) will be the first key level to watch in that scenario:

This article was written by Justin Low at www.forexlive.com.