Dollar holds firmer awaiting the Fed later in the day

The dollar is staying slightly bid on the session as it continues to keep in a decent spot so far this week. The move higher in USD/JPY is arguably a key reason for that. But as Treasury yields are continuing to sit well higher compared to its peers, it is another reason why investors might not be rushing to move away from the greenback just yet.

EUR/USD is now down 0.3% to 1.0840 levels and nearing a test of its 200-day moving average again:

The key level (blue line) helped to arrest yesterday’s drop and will be a big technical focus in the post-Fed reaction. Break below and sellers will be in control to drive the pair towards a test of the 1.0800 mark next. Keep above and buyers are still in with a shout to try and reverse the drop over the last week or so.

Meanwhile, USD/JPY is staying underpinned as it is up 0.5% to 151.55. GBP/USD is down slightly by 0.2% to 1.2695 following a more muted reaction initially to the softer UK CPI data. And we have USD/CAD moving back up to near the 1.3600 mark again, where offers held in overnight trading after softer Canadian CPI data.

Elsewhere, AUD/USD is down 0.2% to 0.6518 as the post-RBA fall is sticking with sellers eyeing a test of the 0.6500 mark.

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