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The Euro-Yen exchange rate has caught the attention of analyst Richard Perry of Hantec Markets who has made it his 'Chart of the Day', noting there is "a real risk that this range could begin to turn corrective now".

Is the euro rally hitting the buffers? In recent weeks since the ECB began to jawbone the euro lower, the Euro/Yen drive higher has fallen over at 127.05 to consolidate between 124.40/127.05.

This consolidation has now broken a four month uptrend support and the bulls have lost control. With the deterioration in momentum indicators there is a real risk that this range could begin to turn corrective now.

The support at 124.40 is key to this.

The old key June high is now a key floor that is coming under growing pressure. A closing breach would complete a top pattern that would imply -265 pips of corrective move.

More importantly, it would be the first breach of a key higher low since recovery began.

The Stochastics rolling over again and RSI back under 50 is a concern for the bulls now and after yesterday’s decisive negative candle, the downside pressure is mounting.

The hourly chart shows growing negative momentum near term, whilst initial resistance is at 125.25/125.75.

Major markets are settling in for a key announcement from the Federal Reserve today. After last week’s rebound (some of which driven by risk-off trading), the dollar has been gradually weakening again in recent sessions.

The perception is that the FOMC will take on board the sentiment from Fed chair Powell’s Jackson Hole speech and adopt a greater tolerance for inflation.

No changes are expected to rates, but will the door be opened to shifting the emphasis of asset purchases? The issues to look for today is how significant changes to the language in the FOMC statement will be.

Also, look for dovish shifts in the dot plot projections of economic forecasts, regarding inflation, growth and unemployment. Expect volatility on yields and the dollar. Signs of potential progress in US Congress over a fiscal relief package.

A $1.5trillion package does not appear to be getting too much agreement anywhere but could pave the way for further talks.

UK inflation has come in slightly ahead of expected in August, even if there was a significant drop.

The UK has avoided the fate of the Eurozone (which went into headline deflation recently). Essentially, all eyes are on the Fed today though.

Today's Calendar

The Fed looms large on the economic calendar today, but retail sales will also be keenly watched. First up though, is the Eurozone Trade Balance at 1000BST which is expected to see the surplus grow to +€19.3bn in July (from +€17.1bn in June).

US Retail Sales are at 1330BST and are expected to show core ex-Autos sales having grown by +0.9% in the month of August (after a +1.9% improvement in July).

The EIA Crude Oil Inventories are at 1530BST and are expected to show a stock build of +2.1m barrels (after a build of +2.0m barrels last week).

The FOMC monetary policy decision is at 1900BST with no change expected to the Fed Funds range of 0.00%/0.25%. The interest will be in how the FOMC accounts for the new average inflation targeting in the statement, and the FOMC dot plots.

Fed chair Powell has his press conference at 1930BST.