EUR/USD, GBP/USD, USD/CHF

Fed policy meeting --> EUR/USD

The focal point of this week appears to be the upcoming decision by the Federal Reserve on Wednesday, since the anticipation of a more accommodative monetary policy in the world's largest economy has been driving the remarkable surge in the stock market recently. Rate reduction expectations have fluctuated significantly this year due to conflicting indications on the Federal Reserve's dual objectives, promoting employment and maintaining price stability.

In FX markets, EUR/USD dived beneath the 1.0900 round number again, holding within the 20- and the 50-day simple moving averages (SMAs). A drop below the 200-day SMA at 1.0835 could send the market towards the medium-term uptrend line near the 1.0795 support, which may act as a turning point. The RSI and the MACD oscillators are suggesting more downside movements in the market as both are losing some ground.

BoE policy meeting --> GBP/USD

The Bank of England meeting is coming up on Thursday and it seems the BoE will be unable to reduce interest rates prior to August, while the Federal Reserve and the European Central Bank are more likely to do so in June. In fact, according to the most recent market pricing, the United Kingdom will have the highest interest rates among the G7 by the end of the year, due to wage and inflationary pressures that are more persistent than those of other economies. Officials from the Bank of England have, as expected, been less dovish on rate cuts than their counterparts around the world.

GBP/USD is suffering notable losses after the pullback from the six-month high of 1.2890 and is ready to test the uptrend line, which stands near 1.2670. If the market slips further then immediate support could come from the 1.2600 psychological mark, near the 200-day SMA. However, a rebound off this line could send the price back to the 1.2890 resistance.

SNB policy meeting --> USD/CHF

On Thursday, there will be a meeting of the Swiss National Bank; similarly, no adjustments to borrowing rates are projected at this meeting. With an inflation rate of only 1.2%, the Alpine nation's central bank, the SNB, has the strongest case for starting rate cuts soon. One explanation for the Swiss franc's near-tipping of the yen as the poorest performing currency this year is the widely anticipated 25-basis-point rate drop for June.

USD/CHF is currently testing the 61.8% Fibonacci retracement level of the down leg from 0.9240 to 0.8332 at 0.8900. A successful rally above this line would endorse the bullish structure towards the 0.8950 resistance level, taken from the inside swing low of November 6. Even higher, the price could meet the 0.9050 barrier. On the flip side, a drop below the 200-day SMA and the uptrend line could hit the 50.0% Fibonacci of 0.8790 ahead of the 50-day SMA at 0.8740.