Yen and European Currencies Testing Medium-term Support in Anticipation of the Fed Meeting

<img src="https://fxopen.com/blog/en/content/images/2024/01/eur-yen.jpg" alt="Yen and European Currencies Testing Medium-term Support in Anticipation of the Fed Meeting" /><p>In the last trading sessions of January, the main currency pairs continue to trade in rather narrow flat corridors formed in the last two months. Thus, the pair EUR/USD managed to return above 1.0800, the pair pound/US dollar is stuck between 1.2760-1.2660, and the buyers of USD/JPY cannot overcome the resistance at 148.30 in the second week. Most likely, the market needs a powerful news impulse to form new trends. An increase in volatility and an exit from the flat corridors can be expected in the next trading sessions. The fundamental data background of the current five-day week is quite saturated.</p><h3>EUR/USD</h3><p>The meeting of the ECB, which took place last week, disappointed buyers of the single European currency. The head of the European regulator, Christine Lagarde, said that the base interest rate could be lowered in the middle of this year. Officials will monitor salary indicators and key economic indicators. If the existing dynamics will be conducive to changing the credit-monetary policy, the rate may be lowered already in June. The ECB&apos;s dovish statements led to a break through the EUR/USD important support level at 1.0800. The EUR/USD chart shows that yesterday, the buyers of the pair were able to return above the specified mark. Further pricing of the pair will depend on the incoming news of this week.</p><p>So, today at 12:00 GMT+3, &#xA0;Philip Lein, the representative of the ECB, is scheduled to speak; a little later, the indicator of GDP of the Eurozone for the fourth quarter will be published.</p><figure><img src="https://lh7-us.googleusercontent.com/n6Z0PA5qkSFv-oL2N_m_Hud5u2BG-ek-6BNbVuo_wqCxlI6upFt8LyBlCMVbvL3Lv_tceRWnSF_MA780G7n1HwL2ZWFl4JOYzGtgVkHZnLeSXBf53hZu45X4pVOE1Fegwkc-l5EjHpXBWSl8tdaqrBBJEhiaSujxYJHewrXBSJQrzG6k4gDaWIzjPbXYWQ" alt="Yen and European Currencies Testing Medium-term Support in Anticipation of the Fed Meeting" loading="lazy" /></figure><h3>GBP/USD</h3><p>The British currency has been trading between 1.2800-1.2600 for the second month. The GBP/USD chart shows that the range has narrowed even more in recent weeks, which may indicate an imminent increase in volatility. What is more, the incoming fundamental data has more to offer. Tomorrow, on the last day of January, the Fed meeting is scheduled, and already on Thursday, the Bank of England will announce its verdict. Market participants do not expect changes in rates at upcoming meetings. First of all, it is important for investors to learn the plans of officials for the upcoming year.</p><p>From a technical analysis point of view, uncertainty is observed in the pound/US dollar pair. The determination of the future trend will depend on whether the fractal 1.2770 or 1.2660 will be broken first.</p><figure><img src="https://lh7-us.googleusercontent.com/oaskTBRm-ExQUp-IBOShp1CuhbDKX2VdLP8yXtarF574yZHYKO8ihrHG1bNPRSdxNhknAYC4DtQf5msXZn4ojYhVxG0uMpN0mf_CazejBH6XEjQ2npiFT0duFcNYtNvOqMd5oUTxNq5h3BQBxRwIgJM7IWQYR8otY5okGGM48jQTF9DWXcT88sjaXtbzXg" alt="Yen and European Currencies Testing Medium-term Support in Anticipation of the Fed Meeting" loading="lazy" /></figure><h3>USD/JPY</h3><p>On the USD/JPY chart, we observe the transition of the pair to the phase of consolidation between 148.70 and 146.60 after a sharp rise at the end of December. The result of the meeting of the Bank of Japan almost did not influence the current situation. We are waiting for investors to react to the decision of American officials.</p><p>In addition to the already mentioned events, today at 18:00 GMT+3, data on the index of consumer confidence in the United States for January will be published. Preliminary employment data for the same period will be released tomorrow.</p><figure><img src="https://lh7-us.googleusercontent.com/IvP5JQrsHlmASF3ui9Y4RpczGtYHlJ_w5UoY6nLx64u2kJRbiRp4Mpc1kATK0dm7f1aUeU-IQypW7x-PaZED9l3fuwU4UzVqMtqKa2VLXpKvDYEj5e9Ah4JO6jQAhX5XbrIte32I8hhuKwX8pv0_5uy_2jUTBmnaPa44NgbO16BwZDFnHC7gPlHUSB2ElA" alt="Yen and European Currencies Testing Medium-term Support in Anticipation of the Fed Meeting" loading="lazy" /></figure>