Asian Session Summary

The dollar drifted lower overnight, with DXY slipping to 101.3 as traders positioned defensively ahead of the Fed’s rate decision. The move was broad-based but shallow — most G10 pairs stayed inside tight ranges against the greenback, with the notable exception of AUD/USD, which sold off hard to 0.6950 on fresh China demand concerns tied to Micron’s warning about escalating tensions. Commodity markets told a split story: oil ripped higher with WTI up 3.7% to $82.18 on Persian Gulf supply fears, while gold climbed 1.65% to $4,103 in a classic risk-hedge bid. The combination of softer USD and surging oil gave CAD a tailwind, with USD/CAD pressing down to 1.4081 lows. JPY was a non-event, with USD/JPY pinned near 163.70 as the market waited for the Fed.

Key Pairs for London

EUR/USD — 1.1401 (▲ +0.28%)
Pushed through 1.14 in Asia and held. The pair is benefiting from broad dollar weakness and Commerzbank’s note flagging softer Fed signals as a EUR tailwind. Session high at 1.1406 is the immediate level — a clean break above opens room toward 1.1430-50. Support sits at the session low of 1.1386. Watch for European PMI revisions or ECB speaker flow to either validate or fade the bid.

AUD/USD — 0.6950 (▼ -0.54%)
Worst performer in G10 by a wide margin. Micron’s China-linked selloff and broader risk-off in Asia tech dragged the Aussie despite copper holding flat (+0.30%). The disconnect between oil/copper strength and AUD weakness suggests this is a China-sentiment trade, not a commodity trade. Session low at 0.6946 is the line — a break below targets 0.6920. Any bounce needs to reclaim 0.6980 to look credible.

EUR/AUD — 1.6404 (▲ +0.82%)
The biggest mover on the board. EUR strength plus AUD weakness is compounding into a clean trend leg. Session high of 1.6422 is resistance. This cross tends to extend during London hours when European real-money flows kick in. If AUD stays offered, 1.6450 is in range.

USD/CAD — 1.4092 (▼ -0.23%)
Oil’s 3.7% surge is doing the heavy lifting here. CAD is the cleanest expression of the Persian Gulf supply-risk premium. Session low at 1.4081 is support — that’s a level the pair has bounced off before. If oil holds gains through London, 1.4060 comes into play. A fade in crude reverses this quickly.

GBP/USD — 1.3303 (▲ +0.10%)
Quiet overnight but sitting near session highs at 1.3307. Sterling is riding the broader USD weakness rather than any UK-specific flow. The 1.33 handle has been sticky — a sustained move above 1.3310 would be the first clean break this week. Support at 1.3281 (session low).

London Calendar Watch

The Fed decision later tonight is the dominant event, but London has its own catalysts. UK mortgage approvals and net lending data are due mid-morning — these won’t move cable much on their own but set the tone for BoE rate expectations. ECB commentary is the wildcard: several Governing Council members are scheduled to speak this week, and any pre-Fed positioning remarks on EUR rates could amplify the EUR/USD bid. The broader backdrop is the Mideast conflict widening — headlines referencing Persian Gulf shipping risks are already in the price via oil, but any escalation during European hours will hit risk sentiment and lift safe-haven flows into CHF and gold.

Bias Going In

EUR/USD bias is cautiously higher — the pair has reclaimed 1.14 and the pre-Fed positioning consensus leans dovish for the dollar, which keeps the path of least resistance to the upside. GBP/USD is neutral-to-bid but needs to clear 1.3310 to attract momentum buyers. The commodity-linked story is split: CAD should hold gains if oil sustains above $81, but AUD looks vulnerable to further selling if China headlines deteriorate during European hours. DXY tone is soft — a drift toward 101.0 is plausible if European flows reinforce the Asian session’s dollar selling, though pre-Fed caution could cap any major move.

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