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    Forex Charts: EURUSD Steady at 1.0860 Range Before Fed Policy, GBPUSD Eased Below 1.4300

    EURUSD: The euro rose to the high of 1.0882 in early Europe, slightly bid at the opening hours as the US dollar is modestly lower against the major currencies before the first Federal Reserve monetary policy decision for the year. The Fed is expected to leave its key overnight lending rate in a range of 0.25 - 0.50% while analysts will scour the Fed's statement for the effects of the January market volatility and turmoil in the equities and falling oil price, which may deter the Fed from raising rates in the near term future despite the upbeat outlook of the U.S. economy. China's Dec Industrial profits -4.7% y/y, Jan-Dec was -2.3%, demand weak, output slowing, which prompted the PBOC to raise their interest rates two weeks ago. Indeed just another sign of China's slowing economy. The euro met profit taking at the 1.0880 level and dippted to 1.0852 low. The movements today are typically position squaring ahead of the Fed announcement later at 19:00 GMT. The level 1.0880 is also the 200 hourly moving average and daily ichi tenkan. Note bids at 1.0825-55 option expires.

    GBPUSD: Cable has been offerred since Europe opened and fell from the high of 1.4350 to the low of 1.4283 (-67 pips) as demand for EURGBP pushing the rate to the high of 0.7615 on euro demand from the low of 0.7565 ( 50 pips). The 1.4350 level proved to be the tough intraday resistance level. Despite the 67 pip decline, the price action is seen as mostly profit-taking of long and mainly position squaring ahead of today's important Fed policy announcment. Although the Asian stocks closed higher, Nikkei 2.72%, Hang Seng 1.02%, the European stock market fell. FTSE -0.59%, Euro Stoxx -1.07%. DAX -0.885 as pf 12:00 GMT weighed on sterling.

    AUDUSD: The australian dollar has retained its firm tone all day following the better-than-expected Australian 4th quarter CPI data which rose 0.4% versus the median forecast of 0.3% compared to 0.5% in the 3rd quarter. The Trimmed median CPI was 0.6% versus the 0.5% forecast compared to 0.3% in the 3rd quarter. The aussie received a knee jerk reaction initially dipping to the intraday low of 0.6980 and spiked higher to 0.7035 immeidiately ( 55 pips) in the prior Asian session. In Europe, the high was 0.7052 and the low was 0.7015 ( 37 pips), just before the NY open the last was 0.7029 steady before the Fed announcement later. The better than expected CPI data however, is by contrast to the likelihood of a dovish RBA monetary policy tomorrow.

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